Q. Describe various tasks in product line appraisal?
Ans.: Company objectives influence product line length. 1 objective is to make a product line to induce up selling. Therefore, maruti would like to move customers up from maruti 800 to Alto to Zen. Therefore, increasing the line length adds more and more products / brands to the line to capture new marketing opportunities.
For example: Videocon offers wide range of products like, washing machines, televisions, refrigerators , air conditioners and microwave under different brand names to cater the needs of entry level, middle level & premium segments. Line stretching and line filling - 2 ways of increasing line length:
Line Stretching: Line stretching is a measure firms undertake often in product mgmt. The goal is to enter a new cost slot and a new market segment. Stretching take place in two ways-
1) Stretching up
2) Stretching down
At times, a company which has at first taken its position in the high cost slot stretches the line downwards by offering products in the similar line for the lower end markets. It is known stretching down. For example: Kodak introduced Kodak fun time film to deal lower priced brands.
In some other example, a company which has at first positioned its products for the lower end markets decides to make higher cost offers for the top slots. It is called stretching up. Several markets have spawned astonishing upscale segments star bucks in coffee, Honda's Acura, Toyota's Lexus.
Two Way Stretch: Companies serving the middle market may decide to stretch their line in both of the directions. Texas instruments introduced its first calculators in the medium cost medium quality end of the market. Slowly it added calculators at the lower end taking market share from Bowmar and at the higher end to complete having Hewlett Packard.
Line Filling: In line filling the firm introduces more objects to the line to plug sure gaps in its existing range of offers to plug holes to shut out competitors. Line filling is overdone if it consequences in confusion of consumer. The company requires differentiating each item in the consumer's mind.
For instance: Videocon has various product lines & room air conditioners are one of them. Videocon entered the market for air conditioners having just 2 or three models, but later on introduced dozens of models.
Line Modernization Featuring & Pruning : Product lines required to be modernized. Companies plan improvements to support customer migration to higher priced items, higher valued,. Companies such as Microsoft & Oracle introduce more advanced versions of their products. It is product modernization. Line pruning is the opposite of line stretching. Here a consumers choice is taken to reduce the no. of items in the line, the company is attempting to save cost maximizes efficiency in production.