A line can comprise related products of various sizes, types, colors, qualities, or prices.
[2] For instance, the variety of coffees that are offered at a café is one of its product lines and it could consist of flat white, cappuccinos, short black, lattes, mochas, etc.
Also, some would offer numerous types of products for diversified markets, depending on the size and objectives of the entities.
Each approaches' results vary based on many factors including location, market, trends, etc.
For instance, a company may be selling health related items such as multi-vitamins tablet and magazines.
The purpose of it is to attract new customers who may not be familiar or satisfied with the current standard product line.
Alternatively, if the new added item is of lower quality compared to other existing products, it is known as trading down or a downward stretch.
[10] It is a process that traders adopt to separate products in the same category into various price groups, to create different quality levels in the customers’ minds.
This strategy allows ease of administering and companies are able to predict their markets of customers and profits much easier.
Although the retailer might lose profit on the first sales item, they will manage to gain it back from the additional products that customers buy.
For instance, retailers will offer a bundle deal for purchasing a new computer with its accessories, such as keyboard and mouse pad.
It involves promoting items at a really low price to entice customers, with only limited supplies.
Therefore, businesses earn their profit off of the unplanned buying decisions by customers besides the loss leaders.
When you have a single saleable item distinguishable by size, appearance, price or some other attribute in your product line, it is called SKU-Stock Keeping Unit.
Its underlying rationale is that these amounts are seen as suitable price points for a whole range of products by prospective customers.
It has the advantage of ease of administering, but the disadvantage of inflexibility, particularly in times of inflation or unstable prices.