Why Do Companies Keep an Unprofitable Product Line - Assignment Example

Keeping an unprofitable segment or product by a company comes as part of the general marketing strategy that the company employs to get its other products recognized and marketed. For this reason, many companies will maintain the segment or product.

As part of their strategies, companies may decide to keep a product whose profits have dwindled marginally or very unprofitable. Some products work in trends.

Inquest to retain the customers that support the product and consider it worth it, the company decides to continue holding the products on the market.

One of the major fails in product terms for Microsoft was the development of the Zune product. This was a portable media player produced in 2006 facing major challenges with the major as the comparison it faced to the iPod that failed to capture the market. Even with the declining sales of this product, Microsoft maintained it on the market until they realized it and continued producing other products that worked better compared to it.