PRODUCT LINE
by Sreeram
This consists of different products that are closely related to each other, in the sense ,that they satisfy a particular class of needs, or are used together .or are distributed through the same channels or possess common physical or technical characteristics .In other words, a
PRODUCT line refers to a group of products clubbed together because they have one of the above described characteristics in common. The
number of product
lines are carried by a
firm at a given point in time is a function of its resources and
competitive position. For example TELCO continued to be a single product line firm until the mid-1980s when its competitive position was threatened in the heavy motor vehicle market by the low cost , more efficient Japanese light commercial vehicle(LCVs) .TELCO responded by developing its own LCV and also by diversifying into the passenger car segment This was a new product line as it catered to a different customer group. Different need and also required different channels of distribution.
In many cases, a firm may start as a single product line company ,emerge a winner, harvest the crops and then add other product lines. Nirma. T-Series, Reliance and many other new generation entrepreneurs have followed this route.
Associated with product
mix are issues like the breadth , depth and consistency Breadth in product mix refers to the number of product lines marketed by a firm. The depth refer to number of product mix is the degree of similarity between product lines in end use, technology and production techniques , distribution channel. etc. This element of consistency is based on the firm’s long term objectives ,its competitive position in the industry ,its strengths and its resources opposition. Some firms like diversity and hence inconsistency is visible in their product mix. For example the engineering giant Larsen and Toubro (L&T) has diversified into cements and medical diagnostics. Likewise ,ITC Ltd , diversified into Hotels, vegetable oils and exports(sea food) and even financial Services .Some firms, on the other hand have product lines that are consistent to their main business .Like Air India ,in civil aviation and also hotel business(Hotel Corporation of India is a subsidiary of Air India and hence Centaur hotels are a part of Air India)
The ideal product mix is an issue from firm to firm and may be hard to define and come by The following situation may suggest that the firm has a sud optimal product mix:
Excess capacity in firm’s manufacturing , warehousing or transportation facilities
High proportion of profits from a small percentage of product items.
Insufficient use of sales force contacts and skills.
Steadily declining sales or profits.
‘Sreeram’ is the pen name of the above abstract writer. His name in the professional field is V.Sree Rama Rao, B.E. ( Mech ), MIMA, M.I.E. is a Techno- commercial business consultant based at Mumbai the financial capital of India. He can be cotacted on
e-mail : vsramarao1@rediffmail.com