# Product Lines Defined and How They Help a Business Grow

> **Definition**
>
> A product line represents numerous products with similar characteristics, functions, prices, and customers.

## What Is a Product Line?

A product line is a group of related products sold under one brand name. Companies sell multiple product lines under different brand names, seeking to distinguish them from each other for better recognition by consumers.

Companies often expand their offerings by adding to existing product lines because consumers are more likely to purchase products from brands with which they are already familiar. In addition, they may add a new product line to an already existing brand.

A company's blend of product lines is known as its product mix or [product portfolio](https://www.investopedia.com/terms/p/product-portfolio.asp).

### Key Takeaways

*   Firms sell multiple product lines under various brand names, often differentiating by price, quality, country, or targeted demographic.
*   Businesses can expand their offerings by adding to existing product lines because consumers are more likely to buy products from brands they already know.
*   Product lines should be abandoned if they prove unprofitable, except in the case of a loss leader.
*   Companies watch product line sales for trends to determine which markets to target.

![Product Line](https://www.investopedia.com/thmb/vbqJtFiJHnvoqwSpDRgArlgcBDs=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Term-Definitions_Product-Line-Final-58870113a3ca4770a85cabf3549894bb.jpg)

*— Investopedia / Mira Norian*

## How Product Lines Work

Product lines are created by companies as a marketing strategy to capture the attention, acceptance, and sales of consumers who, once they like a product or product line, are likely to stick with it.

The operating principle is that consumers respond positively to brands they know and love. They will be willing to try [new products](https://www.investopedia.com/financial-edge/1110/5-companies-that-changed-their-core-products.aspx) added to a particular product line because of their previous positive experiences.

They also may be willing to buy products in a different product line from the same company for the same reason, as long as the defining factors of the line appeal to them.

For example, a cosmetic company that sells a popular, high-priced product line of makeup (that includes foundation, eyeliner, mascara, and lipstick) under a well-known brand name might launch a new product line that offers consumers a lower price point.

Product lines can vary in quality, price, and target market. Companies use product lines to gauge trends, which helps them to determine which markets to target.

## The Growth of Product Lines

Companies add new items to their product lines, sometimes referred to as a product-line extension, to introduce brands to new customers.

Consumers who have no interest in a company's sporting goods, for example, might be more interested in buying its product line of energy bars or sports beverages. Extending product lines allows companies to maximize their reach.

The way that companies use product lines is evident in the [auto industry](https://www.investopedia.com/ask/answers/041615/what-automotive-sector.asp). Auto manufacturers famously produce various product lines of vehicles to reach the widest possible range of consumers.

For this reason, they produce lines of economy vehicles, environmentally-friendly vehicles, and luxury vehicles all under their leading brands. Some are marketed to families, some to individuals, and others to the young.

> **Important**
>
> Expanding product lines enables a company to boost sales by consumers who are already buying its products and are likely to be interested in new ones.

## Product Line vs. Product Mix

### Product Line

A product line is a particular group of goods or services that a company makes and markets to customers.

A food company may extend and diversify a product line by adding related products, such as a company that adds mesquite BBQ-flavored potato chips to its existing potato chip line. If the same company decided to market pretzels, this would be a different product line altogether, involving different ingredients, processes, and knowledge. The new pretzel product line could attract existing potato chip product line customers as well as completely new customers.

### Product Mix

A product mix is the combination of all product lines offered by a company. For example, the company above has a product mix of different types of potato chips and pretzels.

It's useful to analyze a product mix to identify market segment trends. As a result, companies may decide to re-brand or restructure underperforming and unprofitable products or product lines to revitalize them.

Profitable lines may be tagged to include innovative or riskier additions to strengthen the overall product mix.

Mature companies often have diversified product mixes. Internal product development as well as company acquisitions contribute to its product portfolio breadth and size over time. Larger enterprises have the infrastructure to support the marketing of a broader offering.

Geographic expansion can also augment a product mix, with products varying in popularity among cities or countries.

Apple, Inc., for example, has a product mix that includes its popular iPhone line (within which are various generations, versions, sizes, all at different price points), the iOS app store, its line of laptop & desktop computers, software development, a music streaming service, Apple TV, and so on.

> **Fast Fact**
>
> More product lines add up to a diversified product family. The product family has various product lines under the same brand name that are similar but meet slightly different needs or tastes, potentially attracting new customers. 

## Special Considerations

### Product Line Reach

Product lines allow companies to reach regions and socioeconomic groups, sometimes even [worldwide](https://www.investopedia.com/ask/answers/060415/how-much-global-beverage-industry-controlled-coca-cola-and-pepsi.asp).

In some cases, such as the cosmetic industry, companies also launch product lines under their best-selling brands to capture sales from consumers of various ethnic or age groups.

Multinational corporations, such as restaurants, often launch product lines specifically for the countries in which they operate, as is the case with fast-food restaurants operating in Asia.

### Unprofitable Product Lines

Though a product line may be unprofitable, it still can be useful to a company.

A [loss leader](https://www.investopedia.com/terms/l/lossleader.asp) strategy, for example, introduces new customers to a service or product in the hopes of building a customer base and securing future recurring revenue.

The product line may lose money, but products would continue to be sold to attract new customers who could add to the company's profits and start buying additional products and services in the future. In other instances, unprofitable product lines may need to be revamped or abandoned.

## Examples of Product Lines

*   Microsoft Corporation ([MSFT](https://www.investopedia.com/markets/quote?tvwidgetsymbol=msft)) sells several highly recognized product lines including Windows, MS Office, and the Xbox.
*   Nike Inc. ([NKE](https://www.investopedia.com/markets/quote?tvwidgetsymbol=nke)) has product lines for various sports, such as track and field, basketball, and soccer. The company's product lines include footwear, clothing, and equipment.
*   PepsiCo ([PEP](https://www.google.com/search?tbm=fin&q=NASDAQ:+PEP)) owns, among many other lines globally, Frito Lay, Gatorade, Quaker Oats, and Tropicana.
*   The various product lines for Starbucks Corporation ([SBUX](https://www.investopedia.com/markets/quote?tvwidgetsymbol=sbux)) include coffee, ice cream, and drinkware.

Some companies never diversify beyond a single product line. Instead, they focus their efforts on becoming a [market leader in just one thing](https://www.investopedia.com/companies-built-on-a-single-product-4773422).

Michelin, for instance, only produces tires. Crocs only makes rubber-based footwear. Gorilla glue only makes adhesives.

## What Are the Main Types of Product Lines?

While a company's product lines will depend on the particular business segment or industry that it operates in, marketing and organizational scholars have identified four different classifications of product line based on what is needed to bring that line to market. These include:

1.  **New to world:** A brand new product or invention, often established after research & development investment. These can be highly risky but also highly rewarding if they take off.
2.  **New additions:** These are new product lines added by a company to their production, but which are not necessarily new to the world. These arise as competitors enter the market.
3.  **Product revision:** Replacements or upgrades to existing products are the third category. An iPhone 16 is a wholly different product from an iPhone XS.
4.  **Reposition:** Repositioning takes an existing product and begins marketing it to a different audience for a completely different purpose or benefit(s).

  

## What Is Product Line Filling?

Product line filling refers to adding more items to a product line in order to address any perceived gaps in the potential customer base. For instance, adding larger sizes to a clothing line can accommodate people with bigger bodies. Having sizes that fit the vast majority of individuals would fill that product line along that dimension.

## What Is Product Line Pricing?

It refers to different versions of an otherwise same product or service at different price points. Car manufacturers typically offer the same base model for a given year in different trim, ranging from a no-frills economy version to a decked-out luxury version with all the expensive add-ons. The different pricing of the products can attract different consumers with different budgets.

## How Do You Create a Product Line?

A company will develop a product line based on the focus of its business, its particular expertise, and its marketing strategy. Market testing, R&D, and advertising campaigns are all important to bring a product line to market.

## The Bottom Line

A product line is a blend of similar products (or services) typically sold under one brand. The products within a product line will have certain things in common, such as function, price range, target customer, and quality.

Product lines can be seen as marketing strategies. The idea is that if a customer likes one of the products in the line, they'll probably be willing to try other products in the same line or in other lines. This can grow sales and the customer base.