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What is a product line?

Last updated

25 June 2023

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Dovetail Editorial Team

Reviewed by

Cathy Heath

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If you've ever looked closely at a product's fine print and seen a company name different from the brand listed, you've seen a product line in action. It can be confusing when a name you identified with a company turns out to be a subsidiary brand, but there are several strategic reasons for doing so.

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Product line definition

A product line is a unified category of closely related products sold by one company. It allows companies to sell certain products under separate brand names, even if the products use the same company resources.

However, the exact product line definition doesn't hinge on the brand name alone, as different product lines can be sold under the same brand. The key factor is that the products must be of a consistent type according to clearly defined and unifying qualities.

The purposes of a product line include:

  • Maintaining consistent expectations between product types to create better user experiences and protect the brand name

  • Reaching significantly different market segments and buyer personalities to increase sales

  • Leveraging the familiarity and loyalty of a familiar brand name, especially when the company's name isn't well-known

  • Maximizing a company's reach into multiple sectors with products that offer similar benefits and features, with a variety of price points and channels

Examples of product lines

Some common examples of product lines include:

  • A food processing company's organic or diet food product lines (Whole Foods' 365 brand, for example)

  • Value or luxury products sold under a designer brand's name at a different price range (known as "cost categories")

  • A single media company serving radically different interests using two seemingly separate brands (e.g., Vice Media Inc., which Disney owns)

  • The same products sold under a different name overseas (Did you know Burger King is called Hungry Jack's in Australia?)

  • Wildly different product types sold in equally distinct markets (for a time, Kraft Foods was owned by the same company that sold Marlboros)

  • Specialized services only provided over a particular medium (the financial company Goldman Sachs provides eCommerce business loans through Amazon using their online-only subsidiary, Marcus)

Sometimes, different product lines are more similar than dissimilar in some fundamental way. For instance, iPhones and MacBooks are part of different product lines, but they're also highly compatible with each other.

Product line vs product mix

A product mix is a collection of multiple product lines—the company's entire portfolio of separate product lines. Think of a product line as akin to a real estate company's properties within a particular state and the product mix as that same company's total properties nationwide (or even globally). Similarly, a company serving markets of any number and size can operate various product lines.

How to start a product line

At a minimum, starting a product line requires two important considerations:

  1. What type of product line will most effectively reach your company's goals and meet your market's demands?

  2. How do you set the product line pricing most effectively?

Once these two variables are established, you can then create different buyer personas for your product line for design and marketing purposes.

A product-market fit is one efficient way to find the ideal customer while conducting market research and competitor analysis. This process will also help with product line pricing, where you need to know how much your audience is willing to spend on similar brands.

Product line depth

Depth refers to the number of different products featured in a product line. It also relates to the variation of products within a product line. Essentially, product line depth boils down to:

  • Low product line depth, such as when only several variations of a product exist or when product variations are hardly any different

  • High product line depth, where product lines become enormous and even take on a life of their own (They can eventually eclipse the parent company's name—everyone's heard of Google but usually not their parent company, Alphabet Inc.)

How to add or drop a product line?

To increase product line depth, companies engage in product line extension, which is a fancy way of saying that you want to add new products. It can be confusing because a new product line extension can be very different from other products in that same product line, even if they fulfill the same market niche.

An example would be if a sporting goods company branched out into sports drinks or energy bars. They still want to use the same brand as their athletic gear, as they're appealing to the same market. Another example is when a bank, auto mechanic, or hotel makes pens with their name and logo. They're only extending their product line for promotional products—they aren't striking out into the pen industry.

FAQs

What are the types of product line expansion?

Product line expansions generally come in two forms:

  • Horizontal: Where the new product is highly consistent, or "in line," with the existing product line. Offering a red version of a product that already had a blue and yellow version would be a form of horizontal product line expansion.

  • Vertical: When a new product is quite different from the existing product line, but not so much to be a new product line. A product with stripes or polka dots, when the previous versions were all solid colors, would be a type of vertical expansion.

What are five examples of product line pricing?

Product lines allow companies the opportunity to control revenue and market behavior by strategically pricing each product line. In some cases, companies rush less-than-unique product lines to market to sell at different price points.

Some of the most common product line pricing methods include:

1. Loss-leaders (aka "captive pricing")

Sometimes a company knows a product won't exactly bring home the bacon—but they have the inventory to burn and decide to take a sustainable loss by selling it under value. Why? Because giving customers a great deal dramatically boosts visibility for other products that do turn a good profit.

If the loss-leader product is in short supply, this becomes a form of "bait pricing," where the promotional product gets traffic in the door, even long after it's sold out. Be careful not to run afoul of false advertising laws or sour your customer base.

2. Price bundling

Another option for underperforming products is bundling them with other, more attractive products. The goal is to sweeten the deal (even if the cherry isn't that ripe). Of course, you could always bundle more obviously great products together, then raise the bundled price accordingly.

3. Luxury products or add-ons

Creating a deluxe version of an old classic can easily boost sales with or without much creative effort. It can be as simple as offering lifetime storage for a cloud-based SaaS. Luxury trim packages for cars are another major type of luxury product. 

4. Value products

On the other side of the coin, many shoppers look at price tags first and products second. To appeal to these shoppers, make it easy by creating a whole product line founded on more affordable versions.

5. Price lining

Price lining is a bit of a niche tactic, where a product line is set at the same price or within a tight price range. The goal is to simplify the shopper's experience so much that they start making purchases based on impulse, seeing an opportunity to receive more than what they first expected.

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