Posted in Marketing and Strategy Terms, Total Reads: 445
Definition: Product Group
It is a group of related products which share some common attributes like features, use, production processes etc. It could also sometimes be the market or customer segment in which these products are sold or the prices at which they are offered. Many product groups combine to make a product line. For example Life Insurance is a product group which consists of many insurance variants.
There are several benefits of creating a product group.
• A company can leverage the customer loyalty of 1 product in a product group to sell other related products in the group to the same customer without spending much on customer acquisition.
• Different products can be provided from the same product group to serve the varying needs of the consumers. For example HUL has a product group of soaps having different soaps like Lux, Lifebouy, Dove etc for different customer segments.
• Customers who have trust in a brand or the product tend to buy other different products of the same brand rather than trying a different brand. This is a common feature when customers buy electronic items. More often than not they stick to the same brand.
• Products having similar production processes can be grouped together and sold at the discount. For example a Pearlpet produces different shaped and quality bottles and sometimes offers different bottles in a combo deal at a lower price.