
EBK MARKETING
10th Edition
ISBN: 9780135209783
Author: Stuart
Publisher: YUZU
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Question
Chapter 9, Problem 1QA
Summary Introduction
To identify:Reasons for a firm to expand or contract its product line and reasons for a firm having a product mix strategy.
Introduction: The Product line is a similar kind of product in a group under the umbrella of a single brand that mainly focuses on the same market area. For example: Chocolates such as MB, B-1, KTK, etc. belong to the chocolate product line of N Corporation.
Expert Solution & Answer

Explanation of Solution
There can be many reasons for a firm to expand its product line; some of them are as follows:
- The already existing products that have reached to the decline stage of the product life cycle in which the people don’t see any value coming for them, then the company either upgrades and launch a new variant or they develop a new product which expands the product line to compete with the upcoming competition.
- To capture the arising market opportunities, the product line is expanded. For example, if people are moving towards healthy diet and they start preferring honey over sugar, so a company making milkshakes could make new variants of a flavor with honey added to it rather than sugar.
- With changing customers’ needs and demands, a company should also upgrade and launch new products with time. A product line should be expanded when the customers’ demands are changing with time. For example,people started demanding phone camera quality to be matched with a DSLR, so many companies upgrade their phones with better cameras to match with the quality of a DSLR.
- To increase the customer loyalty, the product line is expanded because if a competitor has launched a new product, the loyal customers would also want the company to launch a better competing product.
There can be many reasons for a firm to contract its product line; some of them are as follows:
- When the product becomes unprofitable or obsolete, many companies reduce down their product line and launch new products so that they do not become dependent on a single product.
- When the market gets disrupted by a new technology, companies reduce down or terminate their product line because they know that if they will continue with the same products against disruptive technology, they will just make losses.
Many firms have a product mix strategy for the following reasons:
- To beat down their competition.
- To increase sales because launching so many variants of existing products and new products makes a company to not be dependent on a single product.
- To meet demands of almost all type of customers by adopting a product mix strategy.
- To expand the business because by taping many markets and specifically satisfying the demands of many niche markets, the business also grows.
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