Q&A - Why do most businesses sell more than one product?

Most businesses sell more than one product. Often they will produce several similar products that appeal to different customers. A collection of such products is known as a “product group” or “product range”.

Good examples of product groups include:

• Dell’s range of desktop and laptop computers
• Sony’s range of DVD players and televisions

There are several advantages to having a product range rather than just one product:

• Spread the risk – a decline in one product may be offset by sales of other products
• Selling a single product may not generate enough returns for the business (e.g. the market segment may be too small to earn a living)
• A range can be sold to different segments of the market e.g. family holidays and activity holidays

However a greater range of products can mean that the marketing resources (e.g. personnel and cash) are spread more thinly.