Great posts but as in all theories, there are the exceptions. And when you start looking in detail, you start realizing that your original hypothesis should have been more like. "It depends."

I agree that extension after extension is pointless unless you have a realistic potential for turning a profit at a given point in time. However, there are those cases where you have to develop a complete line in order for any part of the line to be competitive.

Consider trying to get private label work away from a company the size of Proctor and Gamble. You just aren't going to do it with 3 items in your line. This is also true in consumer lines. A recent client of ours has one item, a vitamin, in her product line. One product, one strength, one size. Her goal is to become profitable on that one and then move on to the next.

If you have a highly specialized product, you can get away with one or two items. If however, you have commodity items, you are probably going to have to go pretty deep. I would say however, that the deeper you go, the more revenue that you should be seeing for all lines.

A common product tactic used by many companies is to continuously expand the product line and continously excise products that just don't do well. But again here, there is an exception where you must keep certain products that don't do well but complete your product line. Even the smallest product in a line can be the one that will differentiate you from your competitors.

The original case of the soap family sounds more like a marketing issue first and foremost. Maybe they have the best products in the world but nobody knows about them. They need some strong expertise to help them define and then target a market, and then get the word out. Only then can they know if they have a viable product.

My experience with family run companies is however, that they won't go that route because they have "paid their bills so far", and they cannot see hiring any consultant that will tell them that they are doing something wrong. A client from many years ago was told that he should change a particular label on one of his products. It was old and looked old but not old enough to be cute. Problem was that the old label had a picture of his grandson as a baby on it. He kept that label till he died.


SeniorMag