APPRAISAL OF PRODUCT LINE & BRAND
A growing business has to undertake a constant appraisal of its existing product lines. No product runs for all time to come and no product line is perfect eternally. Changes in the business environment, in customer tastes and preferences, as also the extent of competition building up, all exercise some pressure on the product policy of a firm.
A given product might have lost its market acceptance; it may be facing the threat of functional obsolescence due to new or improved or substitute product; or it might have lost its profitability. Another product may be poor in quality, damaging its own sales as well as those of related members of the line. And yet another might have been through with the useful part of its life cycle and entered the stage of decline. Such instances will come to the fore only if there is a continuous appraisal of each product line and each of the members in the line. And, all such instances call for sound decisions. The decisions may include withdrawal of an existing product, stricter quality control in respect of another, giving an independent brand name to a product, which so far went under an umbrella brand, improving the utility of a product by adding a new feature to it, or introducing a new product altogether. Product line appraisal is thus a dynamic task.
Tasks in Product Line Appraisal
We have seen the example of HLL on product line/product mix. Suppose HLL has to under take product line appraisal. It has to evaluate each product lineâ€”bath soaps, fabric wash, foods, beverages, cosmetics, etc. It has to address issues like:
Soaps line faring, achieving its sales targets, maintaining its share of the market, line carrying too many members/brands, making it unwieldy. The other points are whether there is too much competition among the brands in the line? Is such competition good for the total health of the line?
The other considerations are faring of the individual members/brands in the line, achieving the respective targets in sales/market share/profits and the best performing brands in the line and the weak ones. Whether positioning of the different products/brands in the line is proper and how the recent launches have fared.
It must also be scrutinized about the line pruning or it can take more additions/extensions/variants. The line stretch to new price slots/markets segments can also be analyzed. A detailed assessment of the health, viability, profitability, and consistency of the line and its members takes place.
For most firms, the most dynamic part of marketing strategy revolves around product lines. The firms keep taking decisions concerning the product lines; sometimes they lengthen the line in different ways, sometimes they deepen the line, and at other times, they may shorten and prune a line. They may also attempt some rejuvenation and re-launches of some line members.
Increasing the Line Length
Most firms start with just one product line and one or two items in that line. Over the years, the line grows, as the firm keeps adding more and mo-re products/brands to- the line to capture new marketing opportunities. More product lines also enter the scene, as the firm decides to expand to more new businesses. It is a direct outcome of the long-term corporate growth strategy of the firm handled at the corporate level.
Line Stretching and Line Fillingâ€”Two Ways of Increasing Line Length
Line stretching is a measure firms undertake frequently in product management. The aim is to enter a new price slot and new market segment, which is not covered by the existing offers of the firm. Line stretching can take place in two ways: stretching up and stretching down.
Stretching down and stretching up:
At times, a company, which has initially taken its position in the high slot, stretches the line downwards by offering products in the same line for the lower end markets. This is called stretching down. In some other instances, a company, which has initially positioned its products for the lower end market, decides to make higher priced offer for the top slots. This is called stretching up. In stretching up, the firm moves up the line from its original posture and makes higher priced offers from its stable.
It not only addresses new segments, even existing customers are encouraged to aspire for premium products from their preferred firm/brand.