Page 630 - Encyclopedia of Business and Finance

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Product Lines

the circumstances under which claims may be made product-line manager (sometimes called a product-group
about the nutrients in foods. The act covers only manager), who supervises several product managers who,
nutrients or substances in food that “nourish”; it in turn, are responsible for individual products within the
does not in any way regulate nonnutrient substances line. A product is a distinct unit within the product line
in foods. Moreover, the act requires that labels dis- that is distinguishable by size, price, appearance, or some
close the amount of specified nutrients in foods. other attribute. Decisions about a product line are usually
Every covered food should have a uniform nutrition incorporated into a divisional-level marketing plan, which
label disclosing the amount of calories, fat, salt, and specifies changes in the product lines and allocations to
other nutrients. In order to make this information products in each line. Product-line managers normally
meaningful, the act requires the FDA to issue stan- have the following responsibilities: (1) Consider expan-
dards providing that uniform servings be noted on sion of a given product line; (2) consider products for
the food label. Where the full labeling is impractical, deletion from the product line; (3) evaluate the effects of
the act provides for an exemption or requires that product additions and deletions on the profitability of
the information be provided in a modified form. other items in the line; and (4) allocate resources to indi-
Restaurants, for example, are exempted. vidual products in the line on the basis of marketing
strategies recommended by product managers.
• Federal Trademark Dilution Act (1995): Grants
trademark owners the right to protect trademarks One strategy organizations can employ to help sell
and requires relinquishment of names that match or their products is to use brand-identification strategies.
parallel existing trademarks Brand identification is generally defined as creating a
brand with positive consumer benefits, resulting in con-
SEE ALSO Packaging; Promotion sumer loyalty and repeat purchasing. Other benefits of
brand identification include (1) strong in-store recogni-
BIBLIOGRAPHY tion, (2) stronger competition against competitors’ prod-
Kotler, Philip, and Armstrong, Gary (2006). Principles of market- ucts, (3) better distribution, and (4) better in-store shelf
ing (11th ed.). Upper Saddle River, NJ: Pearson Prentice- position. Organizations have four basic types of branding
Hall. available: individual brand names, family brand names,
Kotler, Philip, and Keller, Kevin (2006). Marketing management: product-line brand names, and corporate brand names.
Analysis, planning, implementation, and control (12th ed.). Individual brand names can be used to establish
Upper Saddle River, NJ: Pearson Prentice Hall.
brand identification without reference to an integrated
Lascu, D. N., and Clow, K. E. (2004). Marketing frontiers: Con- product line or to the corporate name. Each brand is sold
cepts and tools. Cincinnati: Atomic Dog.
individually and stands or falls on its own. Family brand
Pride, William M., and Ferrell, O. C. (2006). Marketing concepts
and strategies. Boston: Houghton Mifflin. names involve the opposite strategy—including the firms’
total product mix under one family name. The corporate
Solomon, M. R., Marshall, G. W., and Stuart E. W. (2006).
Marketing: Real people, real choices. Upper Saddle River, NJ: name, rather than the brand name, is emphasized in order
Pearson Prentice-Hall. to leverage the high-quality name of the organization.
This can reduce advertising and marketing costs. Product-
line brand names involve a strategy midway between an
Thomas R. Baird individual brand name and a family brand name strategy.
Michael J. Milbier
All brands within the product line have a common name.
Product-line brand names are used when a company pro-
duces diverse product lines that require separate identifi-
cation. Some companies employ the corporate brand
PRODUCT LINES name strategy. This strategy associates a strong corporate
The product mix of a company is the total composite of entity with a brand while maintaining the brand’s individ-
products offered by that organization. A product line is a uality. If successful, it provides the advantages of both a
group of products within the product mix that are closely family brand name and an individual brand name strat-
related, either because they function in a similar manner, egy.
are sold to the same customer groups, are marketed An important concept for any product-line manager
through the same types of outlets, or fall within given is the product life cycle, which is defined as the various
price ranges. stages a product goes through (introduction, growth,
Product-line decisions are concerned with the combi- maturity, and decline). The primary function of the intro-
nation of individual products offered in a given line. The duction stage is to create a solid brand name for the new
responsibility for a given product line resides with a product. Television, Internet, radio, and print advertise-

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 607