DEFINITION of 'Product Family'

A group of related goods that are manufactured by a single company. Companies benefit from creating product families in that they can leverage the loyalty their existing customers feel toward an existing product to get them to buy additional, related products. Product families also allow companies to attract new customers to their brand by providing an array of products that are similar but meet slightly different needs. Customers benefit from product families because they can rely on their positive experience with an existing brand when choosing a new product.

BREAKING DOWN 'Product Family'

For example, a backyard gardener might have been using the same pesticide for years to control the caterpillars that always try to eat his tomato plants. One year, he decides to try growing sugar snap peas for the first time and discovers that he needs a new product to control a disease, powdery mildew, that is affecting his crop. The company that produces the caterpillar pesticide has an entire family of products to help the home gardener successfully cultivate different crops, so when the gardener goes to the store to purchase a product for his new problem, he looks for one made by the same brand that he is already using. The gardener can shop quickly and get peace of mind by buying from a product family he already has experience with, and the gardening product company gains additional business from an existing customer.

RELATED TERMS
  1. Productize

    To take a new service, product or product feature - that a company ...
  2. Product Line

    A group of related products manufactured by a single company. ...
  3. Brand Loyalty

    When consumers become committed to your brand and make repeat ...
  4. Brand Extension

    A common method of launching a new product by using an existing ...
  5. Mass Customization

    The process of delivering wide-market goods and services that ...
  6. Market Leader

    A company that has the largest market share in an industry, and ...
Related Articles
  1. Investing

    Low-Cost Ideas For Urban Gardening

    Because urban gardening is a growing trend to create lots of greenery in your home, we give you these low-cost ideas without requiring a plot of land.
  2. Small Business

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  3. Small Business

    Explaining Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent.
  4. Financial Advisor

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
  5. Small Business

    Has Nepotism Ever Worked?

    It may very well be that hiring a relative is the right course of action for you. But before you do, carefully consider how hiring family could hurt your business.
  6. Investing

    Understanding Marginal Cost of Production

    Marginal cost of production is an economics term that refers to the change in production costs resulting from producing one more unit.
  7. Financial Advisor

    How Advisors Can Appeal to Nontraditional Families

    So-called traditional families represent less than 20% of U.S. households today. Here's how advisors can adjust.
  8. Investing

    These Financial Products Are Too Complex For The Average Joe

    Structured financial products are so elaborate that investors are unable to assess costs and risk.
  9. Managing Wealth

    Family Philanthropy: Developing a Cohesive Strategy

    Devising a cohesive family philanthropy strategy requires proper goal alignment, planning, management, procedural rules and constant evaluation.
  10. Small Business

    Understanding Product Lines

    A product line is a group of related products manufactured by the same company.
RELATED FAQS
  1. What are some ways a company can expand its product line?

    Understand what a product line is and why it's important. Learn about specific ways in which a company can expand its product ... Read Answer >>
  2. What are the differences between product bundling and product lines?

    Understand the differences between product bundling and product lines. Learn why a company would want to expand its product ... Read Answer >>
  3. How is a product line depth related to a product line?

    Understand what a product line is and why it's important to a company. Learn how product line depth is related to a company's ... Read Answer >>
  4. What is the difference between research and development and product development?

    Understand the difference between research and development and product development. Learn why a company would want to invest ... Read Answer >>
  5. What are the similarities between product differentiation and product positioning?

    Learn how two marketing strategies, product differentiation and product positioning, are similar and work together to effectively ... Read Answer >>
  6. Is there any way to reverse the law of diminishing marginal returns?

    Learn more about how consumer spending, supply and demand impact production decisions. Find out more about the law of diminishing ... Read Answer >>
Hot Definitions
  1. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  2. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  3. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  4. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  5. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  6. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
Trading Center