Notes On Product Line Policy Of The Firm:

Meaning Of Product Line:

       A product line is a group of products that are closely related either they function in a similar manner or are sold to some customers grouped or marketed through to the same type of outlet or fall within the given price range.

Defined by William J. Stanton:

       In the opinion of William J. Stanton, "A bought group of products intended for essentially the similar uses and possessing similar physical characteristics constitute a product line."

Alternative Product Line Policy Of The Firm:

       In modern times, no the producer, distributor or retailer deals in a single product, they usually deal in multiple products. The number and nature of products being produced by a firm can never be the same. Many reasons compel the firm to make changes in their product line. To regulate the changes, the companies should proceed according to well conceived plans. This is known as product line policy or strategy.

       A firm may adopt the following alternative policy:

1. Product Innovation:

       The first strategy of product line policy is product innovation or adding more and more new products in the product line. This helps the management to diversify the risk and increase the volume of sales. Continuous research is very essential for this.

2. Product Improvements:

       It is necessary to modify and improve the quality of the existing products so that it may almost become a new product. Competitions compels the producers to bring out new models of their products

3. Product Dropping:

       It is necessary to review the product line from time to time and drop those products which have lost their market and have become uneconomical.

4. Policy of Planned Obsolescence:

       Some manufacturers adopt the policy of planned obsolescence. They bring out new models and drop the old ones. This helps to attract new customers and increase sales. This strategy is generally adopted by the manufacturer of readymade garments and home appliances.

5. Policy of product Differentiation:

       Some manufacturer adopts this policy just to attract new customers. They make minor changes in their brand, packaging or style. They do not differ in quality or performance. However, this policy creates brand loyalty among the customers and sale is ensured.

       Detergents and cosmetics manufacturer adopt this policy and are quite successful in their attempt.