Two Way Stretch

Companies in the middle range of the market may decide to stretch their lines in both directions. Sony did this to hold off copycat competitors of its Walkman line of personal tape players. Sony introduced its first Walkman in the middle of the market. As imitative competitors moved in with lower-priced models, Sony stretched downwards. At the same time, in order to add lustre to its lower-priced models and to attract more affluent consumers keen to trade up to a better model, Sony stretched the Walkman line upwards. It sells more than 100 models, ranging from a plain playback-only version for £20 to a high-tech, high-quaJSty £350 version that both plays and records. Using this two-way stretch .strategy, Sony came to dominate the global personal tape player market.

• Product Line-Filling Decisions

Rather than stretching into lower- or higher-end segments, the firm can lengthen its product line by adding more items within the present range of the line. There are several reasons for product line filling: reaching for extra profits, trying to satisfy dealers, trying to use excess capacity, trying to be the leading full-line company, and trying to plug holts to keep out competitors. Thus Sony filled its line by adding solar-powered and waterproof Walkmans and an ultralight model that attaches to a sweat band for joggers, cyclists, tennis players and other exercisers.

However, line filling is overdone if it results in cannibalization and customer confusion. The company should, therefore, ensure that new items are noticeably different from existing ones.

• Product Line-Moderni.zati.ort Decisions

In some cases, product line length is adequate but performance may be improved by modernizing or revamping the products. For example, a company's machine tools may have a 1950s look and lose out to better-styled competitors' lines.

The firm can overhaul the line piecemeal or all at once. A piecemeal approach allows the company to test customers' and dealers' response to the new styles before changing the whole line. It also causes less drain on the company's cash flow. A big disadvantage of piecemeal modernization is that it allows competitors to see changes and start redesigning their own lines.

product line filling Increasing the product line by adding more items within the present range of the line.

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