Page 631 - Encyclopedia of Business and Finance

eobf_P 7/5/06 3:18 PM Page 608

Product Lines

Television personality Tim Allen displays additions to his “Tim Allen Signature Tools” product line in conjunction with his hit
television show, Home Improvement, June 1999. AP IMAGES

ments are coordinated to provide the maximum brand the company is successful in repositioning the product to
awareness. In the growth stage, the company focuses on new market segments. Another method used to extend the
creating loyalty to the specific product and also attempts life cycle of a product line is a line-modernization strategy,
to make minor improvements. Advertising emphasizes the which focuses on either upgrading the entire product line
benefits of the product, since the name is already known. or modernizing specifics products within the line in order
When the maturity stage begins, sales start to level off to spark new consumer interest in the product or entire
because of increased competition, changes in consumer product line.
behavior, or technological advances that make the product Other general product-line strategies include product-
less desirable than that of its competitors. In this stage, a
line additions, product-line deletions, and holding strat-
company may decide to put limited resources into an egy. Product-line additions involve adding new products
advertising campaign to boost sales or create a new image.
to a product line so new market segments can be covered.
In addition, minor adjustments might be made to packag- Product-line deletions involve removing a product that
ing (e.g., a new label) to reattract consumers. The decline
has not performed well or is not making enough money.
stage occurs when sales begin to decline. The company A holding strategy involves maintaining the status quo.
needs to choose between modifying the product to
The product line stays the same and no major modifica-
increase sales or discontinuing the product when it finally tions or marketing strategy changes are planned. In order
cannot generate acceptable profits.
to have a profitable product line, the product line man-
The product life cycle is an extremely important ele- ager will need to employ a variety of the strategies.
ment when a company reviews its product line. One of
the best ways to extend the life of a product and product SEE ALSO Marketing
line is for a company to use a revitalization strategy. When
this tactic is used, the company changes the marketing BIBLIOGRAPHY
plan and looks for new markets for the existing product Assael, Henry (1985). Marketing Management: Strategy and
line and the products within it. Here too it is critical that Action. Boston: Kent Publishing Company.

608 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION