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Companies employ different strategies to expand their product line depth, which refers to the number of products in a specific product line.
Describe the different tactics for implementing full-line and limited-line product strategies
Companies with full-line strategies attempt to enhance product line depth through carrying a high number of variations on a similar product in order to satisfy a wide range of different customer desires.
Companies with limited-line strategies will carry a select few product variations with the highest impact, rather than carrying every conceivable variation of the product.
Line-filling and line-pruning strategies can take place, depending on whether there is a perceived void in the product line, or whether an existing product in the line becomes obsolete or unprofitable.
A product line can contain one product or hundreds. The number of products in a product line refer to its product line depth, while the number of separate product lines owned by a company is the product line width (or breadth).
There are two basic strategies that deal with whether the company will attempt to carry every conceivable product needed and wanted by the consumer or whether they will carry selected items. The former is a full-line strategy while the latter is called a limited-line strategy.
Line-filling strategies occur when a void in the existing product line has not been filled or a new void has developed due to the activities of competitors or the request of consumers. Before considering such a strategy, several key questions should be answered: Can the new product support itself? Will it cannibalize existing products? Will existing outlets be willing to stock it? Will competitors fill the gap if we do not? What will happen if we do not act?
Assuming that the company decides to fill out the product line further, there are several ways of implementing this decision. Three are most common:
Product proliferation: the introduction of new varieties of the initial product or products that are similar (e.g. a ketchup manufacturer introduces a hickory-flavored sauce, a pizza-flavored barbecue sauce, and a special hot dog sauce)
Brand extension: strong brand preference allows the company to introduce the related product under the brand umbrella (e.g. Jell-O introduces pie filling and diet desserts under the Jell-O brand name)
Private branding: producing and distributing a related product under the brand of a distributor or other producers (e.g. Firestone producing a less expensive tire for Kmart)
In addition to the demand of consumers or pressures from competitors, there are other legitimate reasons to engage in these tactics. First, the additional products may have a greater appeal and serve a greater customer base than did the original product. Second, the additional product or brand can create excitement both for the manufacturer and distributor. Third, shelf space taken by the new product means it cannot be used by competitors. Finally, the danger of the original product becoming outmoded is hedged. Yet there is stil serious risk to consider: unless there are markets for proliferation that will expand the brand's share, the newer forms will cannibalize the original product and depress profits.
Line-pruning strategies involve the process of getting rid of products that no longer contribute to company profits. A simple fact of marketing is that sooner or later a product will decline in demand and require pruning. Timex has stopped selling home computers. Hallmark has stopped selling talking cards. A great many of the components used in the latest automobile have replaced far more expensive parts, due to the increased costs in other areas of the process, such as labor.
Using modern robotics technology has halved the manufacturing costs of several products. Through such implementation, Keebler Cookies moved from packaging their cookies totally by hand to 70% automation. Other possible ways a company might become more efficient are by replacing antiquated machinery, moving production closer to the point of sale, subcontracting out part of the manufacturing process, or hiring more productive employees.