Product family definition
/What is a Product Family?
A product family is a cluster of products that are built on the same platform. By designing multiple products with the same platform, a company saves on product development costs and can buy raw materials and components in larger quantities, thereby reducing its costs. A product family is usually marketed in the same way and sold through the same distribution channels. By doing so, a company can create a brand around the entire group of products, so that customers can feel comfortable with any product in the group. Products within the group are similar, but designed to meet a range of needs and tastes. Customers are more likely to upgrade to other products within the family, rather than buying from a competitor where the look and feel of the product is different. Thus, the concept can be used to engender a sense of brand loyalty among consumers.
The product family concept works especially well when the product quality and customer service levels are high, so that customers have no reason to look elsewhere when they want to replace a product.
Advantages of a Product Family
There are numerous advantages to having a formal product family, which are as follows:
Take advantage of customer trust. By having a product family, any trust generated from a single product within the lineup is likely to then be associated with other products in the product line. This tends to increase sales across the entire product family.
Reduce product costs. By sharing parts and assemblies across products, a business can generate volume purchase discounts, as well as production efficiencies that lower its overall costs.
Reduce marketing costs. By spending marketing funds on an entire product line, a business does not have to spend money on individual products within the product line - which saves money.
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Example of a Product Family
Toyota manufactures a full range of vehicle offerings, including sedans, SUVs, and pickup trucks. They share some parts, thereby allowing for bulk purchases that lower its costs. The vehicles are also marketed under the Toyota logo, so that customers identify with the brand across all vehicles presented. Given the universally high quality of its offerings, customers are more likely to make repeat purchases across the product family than to buy from a competitor.