The company uses the value of the existing product to market and introduce new choices to consumers. This is as opposed to brand extension which is a new product in a totally different product category. How you do that depends on the results youre seeing, but Marc was quick to point out that if you see a product is moving quickly, its important to double down and give the successful product more prominent placement or more ad spend. Both took a large investment of marketing funds to distinguish them from current company products as well as competitors. The managers of a successful brand must develop a clear understanding of its key equity elements and implement guidelines for leveraging them in the marketplace. While theres no better way to know someone will buy your products than launching and making a sale, there are other ways to gather valuable feedback from your audience. Constant pressure for the next line extension reduces the resources available for significant new product development. Another challenge of a product line extension is that the firm is now producing a wider variety of products. Brand recognition, the watchword of marketers today, bolsters the egos of many senior managers at the expense of brand loyalty. It is essential that product developers and marketers compellingly answer all these questions for the executives and the people who will buy the new product. The negative quality associations were overlooked because of the brands perceived innovation and positive variety effects. Reasonable minds will differ whether a new product constitutes a line extension or a brand extension. Also, ask them what the specific features are and attributes of the product that attracts them the most and makes them finally purchase the product. , (1999) emphasizes that, this happens when a company is introducing a new products that falls under the same category within an already existing brand. Failures in line extensions come in all shapes and sizes. Marketing executives and product managers develop and launch products as something to do. Indeed, with the right cost-accounting and market-research systems in place, line extensions can be quite profitable. For example, in recent years PepsiCo has introduced a variety of new products such as Quaker Oats breakfast bars and Gatorade protein shakes to refresh its existing lineup of soft drinks and snacks. The bottle has a built-in propellant, so you just hold down the trigger, and it sprays a consistent stream. Watch the VOX video if you want to learn more about the effects of Indias preference for light skin. If you answered whiskey, you are correct. Right from the narrow bottom, slim fit, comfort fit to baggy fits, and more; Levis has fits for every taste and body type. Failure to adapt product lines to either of these types of change means extinction. I do, however, see a role for extensions as a method of continually improving the core brand. But nothing lasts forever, and cultural views of cannabis have changed nearly a century later. But that doesnt mean your hands are tied and you need to spend hundreds of dollars on an untested product. David R. Beatty is President, Weston Foods Ltd., Toronto, Ontario, Canada. If the line-extension image jars with any of the brand equity elements, it will erode the entire line. Challenges of a product line extension - THE Marketing Study Guide Snackcos direct-delivery system supplies good data and greater influence over how products are placed. Typically a line extension is a new flavor, scent, formula, color, size, or style of a product in a current product line. What is Line Extension? Example - Apple HomePod - Izey Victoria Odiase Sometimes aline extensionis called aproduct extension. 9 Line Extension Examples for 2020: from Coke to Honda - BMB Low Depth. Satisfries used a different formulation of batter, which turned out less porous and thus absorbed less of the cooking oil while cooking in the deep fryer. The resulting fries had fewer calories and less fat than their traditional fries. Manufacturers feel that the increasingly powerful retailers (as Quelch and Kenny put it) are to blame for their low margins and shifting market shares. Product extension is defined as the use of an already established product brand name like Gucci to prod uce a n ew product in the same category. Weve covered Mr. Clean before in our examples of umbrella brands. Worry about achieving this quarters goals this quarter, and worry about next quarters goals next quarter is the dominant sentiment expressed in many management meetings. Product Line: A product line is a group of related products under a single brand sold by the same company. This is when a company with an established brand introduces additional items in a product category. It is less risky than launching an entirely new product, as there is already some customer base and awareness for the brand. Shelf-allocation models that two colleagues and I built confirm that selecting the right products and giving them enough space to keep them in stock are far more important than adding space for marginal items. Service extensions involve providing new services that are related to the company's existing products or services. The settlers of the new world came over on boats with sails made of hemp, and King James decreed that the American colonists in Jamestown were to cultivate and export hemp plants. The Nissan LEAF is a battery electric vehicle (BEV) that dominated the market for a decade. This naturally implies that the organization as more products to produce, store, transport, market and support. Think about the last time you really wanted ice cream from the grocery store. This ad became a meme around the internet, and the new product benefitted from the free promotion that came with all the GIFs and social media comments. 1. An idea that is great for one level of execution but diminishes the other would not be greenlit. The most important thing to keep in mind is that no one knows what will work best before they launch. But the upmarket product image, in addition to the user image of the varietals, was an important positive association for the parent. The success of Diet Coke is a testament to the power of brand loyalty among consumers. Hondas introduction and management of the Si trim level in the Civic product line have envigorated the brand. This can make the company seem more customer-friendly and responsive to their needs. For example, if a company already sells a popular candy bar, it may decide to create different flavors or sizes of that candy bar, to appeal to consumers who prefer different tastes or who want a different sized product. But first, we go through some basics of brand extensions. This is when a company with an established brand introduces additional items in a product category. But in 2010, they extended the Ferrari brand into theme parks by opening the Ferrari World in Abu Dhabi. Unilever extended their line of mayonnaise style sauces with one that contains olive oil. Because of the success of the original cookie, Oreo decided to create slight variations of the cookie, all under the Oreo brand. They are trying to innovate on those crummy but ubiquitous bottles. While our focus was on the hidden costs of line extensions, several respondents, including Laura Wicke, emphasized how poorly planned line extensions can incrementally diminish a brands equity without this effect being noticed until it is too late. Or when a toothpaste company has a product that focuses on whitening teeth and then provides a toothpaste that reduces tooth sensitivity. Multiple line extensions that weaken a brands identity can also erode equity. Yet these symptoms are just another consequence of avoiding long-range brand issues. You can check my recent posts here, (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_3999100996") }), Your email address will not be published. It was slowly ramping up alongside Cinnamon Coke, but then the buzz around it exploded in mid-November. They have an innovation SKU they call a Limited Batch Flavor. As of writing this, the flavor is Pucker Upper Sorbet. In 1992, Colgate introduced its stand-up tube; now it seems that all the major brands have adopted such packaging. A skin soap with exfoliants and whiteners for people who value having fairer skin. The goal of line extension is to satisfy a refined customer segment . The LEAF was upgraded every year it has been in the market, and Nissan completely revamped the LEAF in 2017. The promise means arebrandingof Fair & Lovely because fair is in the brand name, which will be a significant financial hit for Unilever as it is the leading brand in many markets. Product Line Extensions 101: What It Is, Examples, And Tips For Launching a new product in an existing line is reasonable if there is a strong reason. Many brands find themselves at a point where they have achieved some success with their line of products, and they are feeling pressure from investors and business partners to keep growing. A new variant of an existing product that competes in the same category. A company with an established production process and capacity to produce new products means lower upfront investment. Line extension is a marketing strategy used to expand a product line. You should consider using P&Gs levels of execution (product, packaging, brand communication, retail execution, and value) when evaluating your new products. Line extension is a marketing strategy used to expand a product line. Within the context of brand strategy, line extension can help to increase a brand's awareness and equity by giving customers more opportunities to interact with the brand and become familiar with its products. Brand Extension: Types, Examples, Line Extension Vs. Brand Extension What does a magazine from Oprah give us that other magazines don't? Most of the food and beverage line extensions we discussed (Hellmanns Olive Oil, Cristal Pepsi, and Burger King Satisfries) all were responses to the trend towards health and ingredient-conscious eating. But the real mistake was not replacing the regular menu fries with Satisfries. In other words, companies don't want to overexpose their brand to the point where consumers are confused about what types of products they offer. There used to be one type of Oreo cookie. Nissan extended their line of compact cars with an electric car. As we discussed, Mr. Clean Clean Freak Mist is a superior way to spray and clean, but it would be inappropriate to pull the classic Mr. Clean spray cleaner that everyone knows and is familiar with using. An additional risk is a possibility of overexposing your brand name by using it on too many different products. Paul Farris correctly underlined our goal of helping companies steer a course between variety and redundancy. As David Beatty noted, the politics of brand-management career paths and the need to preserve shelf facings in view of the higher quality private-label competition result in too many line extensions being launched in the hope that one or two will stick. flashcard set{{course.flashcardSetCoun > 1 ? Now Nissan seems to be preparing the Zero Emissions brand to encompass more vehicles than the Leaf. In 2015, Unilever responded to the market preference for healthy and simple ingredients by replacing some of the soybean oil in their standard mayonnaise with olive oil and marketing it as a new product. And if the competitors products range better in terms of features and attributes, it can affect the sales and profits of the firm. Depending on your brand, you might be able to recruit a focus group or get your audience to take a survey in one of a few ways. But that doesn't mean your hands are tied and that you need to spend hundreds of dollars on an untested product. By entering your email, you agree to receive marketing emailsfromShopify. 7-Keto DHEA Metabolite, 100 mg, 60 vegetarian capsules. - Definition, Types & Importance, Psychological Research & Experimental Design, All Teacher Certification Test Prep Courses, AMA PCM Exam: Business-to-Business Marketing, AMA PCM Exam: Segment Targeting & Positioning, Branding and Brand Equity in Business Marketing, What Is Brand Strategy? Product line extensions can be classified into two types: The Horizontal and the Vertical Extension. The confusion over the benefits of Satisfries should have been self-evident if the company was in touch with their customers and regularly soliciting their feedback. Sometimes theres just no way around it: you need to invest in new product line extensions and hold them as inventory in order to get the information you need. Colgate Cavity Protection, Colgate Total, Colgate Optic White, Colgate Enamel Health, Colgate Max Fresh, Colgate Sensitive Pro-Relief, and more. Brand Extension: Branding Strategies Line Extension, Multiple Brands c. Line extensions are designed to better meet the needs of the existing market New products also come with media attention in the form of announcements, reviews, and recommendations. Consider the factors such as market growth, sales, profits, return on investment, and market share as compared to the products of the competitors in the market. As long as manufacturers focus on the short term, profits will decline. Consumers are often willing to forgive strong brands when they stumble. They were so superior that they made an emotional connection with consumers, to the point that consumers really missed having that brand in their lives if they switched to another brand.. The same goes fordropshippingwith an app likeDSers, if youre looking to test out the appeal of entirely newtrending productsor product categories. Overexposure can be especially damaging to luxury brands that rely on a certain level of exclusivity to maintain their appeal. Please do not use it for frying. Product Lines Defined and How They Help a Business Grow - Investopedia As quite a number of times, the customers are highly attracted to the product that is one of a kind and unique. How to Find and Source a Winning Product to Sell. With the strategy of Product Line Extension, the firm is able to cater to the different segments of the customers that prefer the product in other variants such as shape, color, flavor, and more. Some example of brand extension are: Apple: from personal computers into MP3 players. The best Proctor & Gamble (owners of the Mr. Clean brand) can hope for us to move people over to Clean Freak over time. 1. The bad news is that theres no way to fully predict which product line extensions will resonate with your audience before you add them to your store. There are several risks associated with line extension, including the risk that the new product may not be well-received by consumers or that it will compete too closely with existing products in the company's portfolio. You already have a successful brand, so any related products you release will likely be welcomed by customer segments. One might achieve this by 'filling' a product line or 'stretching' it. Both the culture and the brands have to change together. Mass production 3. This can involve introducing new products that are variations of existing products, such as different flavors or sizes, or creating similar products that are related to the original product line in some way. (Am I right? Proctor and Gamble want to innovate on their entrenched lines pf business before an outside player forces them to. The goal of line extension is to satisfy a refined customer segment in the market. When you already have a database of customers, it creates a favorable environment for you to launch the product. Part Type. Typically a line extension is a new flavor, scent, formula, color, size, or style of a product in a current product line. The brand is essentially competing with its old products. Its like a teacher waved a magic wand and did the work for me. Customer need for variety Customers try new brands in order to break away from boredom. The brand has also launched regular coke in an array of packaging materials and sizes as well. Making a chocolate chip version, a mint version, or ice cream sandwich version are types of line extensions. Product line extension is the practice of using an already established product's brand name to introduce a new merchandise in the same product category. There are times when a brand extension is a better fit. Since then, it has become one of the company's most popular products and spawned multiple line extensions, including Diet Coke Plus, Diet Coke With Splenda, and others. What are their unique features and attributes? Oreo has also expanded its brand. Clean Freak Mist is foaming, doesnt run down a wall, and always multi-surface. Excited about starting a business, but not sure where to start? Ive seen firsthand how much business owners learn when they run focus groups for different target markets, countries, or audiences. Of the 80 races between 1988 and 1992, McLaren Hondas won 44 of them. (Bleacher Report)Their success in Formula one directly benefitted the Honda Civic Si and the reputation it has today. Marketers would do better if they thought of themselves as biologists studying the evolution of a species rather than as accountants studying each element of cost in ever finer detail. Lux Aqua Sparkle, Lux Soft Touch, Lux Magical Spell, Lux Velvet Touch. Honda extended their line of compact cars with an sport hatchback. Oprah's television personality and success eventually carried over after much time and money. Copyright 2022 Marketing91 All Rights Reserved. Mr. Clean: Clean Freak Mist is an innovative product. Plus, get practice tests, quizzes, and personalized coaching to help you In addition to gradual evolution, punctuated equilibrium also exists in both ecological and marketing realms. Hi, I am an MBA and the CEO of Marketing91. Line extensions are a quick and low-cost way to spike sales in the short term. Unfortunately, a few of the participants misinterpreted our argument. This may confuse consumers. Simply replacing established brands with new, improved formulas can be unnecessarily risky. Your email address will not be published. Brand loyalty is weakened 3. Product-line extensions can be effective ways to test-market product improvements and at the same time address emerging segments. This guide will walk you through examples and tips on creating an extension strategy, so you too can extend your brands product line. GUCCI HOME LINE EXTENSION. - Eddusaver Store labels like these have created a sudden burst of change. But I had no idea that it was the market leader until the Tesla Model 3 ramped up production. The bottle also doesnt require to be straight up and down like a standard spray bottle; the Clean Freak Mist bottle can be shot sideways or even completely upside down. Even a successful extension can damage its parents image. Pepsi spent an enormous amount of money on the brand and, regardless, we killed it, said former Coca-Cola executive Sergio Zyma noted in the book, Killing Giants: 10 Strategies to Topple the Goliath in Your Industry. [Honda and McLaren was] one of the most successful partnerships in recent Formula One history. Some of the most common include the risk of diluting and overexposing the brand, the risk of cannibalization, and the need for careful planning. Mr. Clean is owned and managed by Proctor & Gamble. Types of product line extensions Here's How To Avoid Customer Complaints Before They Happen, How To Build Your Own Brand From Scratch in 7 Steps, What Are Brand Guidelines and How To Create a Style Guide, How To Sell Food Online: A Step-by-Step Startup Guide (2023). But it was bad because it placed us in one category only.. Sometimes there's just no way around it: You need to invest in new product line extensions, and hold them as inventory, in order to get the information you need. The competitors of the brand also pull up their socks and come up with the strategy of their Product Line Extension in order to stay relevant in the market. Its since expanded the product by introducing new flavors such as Ginger Lime and Feisty Cherry to appeal to millennial consumers. Because it is so popular, Dove decided to undergo a product line extension. Maybe you want a vanilla-cherry flavor. We have hair extensions for home and professional use to make every day a great hair day. The problem Snackco faces can become an even tougher battle in the majority of companies. The disinfectant Lysol, for example, proved that a brand can be extended across several categoriesif a common and important consumer benefit exists in both the products and consumer perceptions. Line extension can be used as a way to address these concerns and position a company as being environmentally responsible. I would definitely recommend Study.com to my colleagues. Questions concerning benefits, target audiences, and levels of support for the centerpieces of a line become almost impossible to resolve. Extending a product line is less risky than launching an entirely new product or performing abrand extensionbecause customers are already familiar with the existing products and are more likely to try the new product. Marketing Communication: Meaning & Types of Marketing Communication. Product Line Extension - Monash Business School To unlock this lesson you must be a Study.com Member. Defining Line Extension as a "New Formulation". It still builds a sense of excitement and innovation around the brand. Line extensions are relatively low risk compared to entering a new product category. The concept of Product Line Extension can be defined as a business strategy where the firm plans to expand its established product brand name with the new range of items in the product category. Managing a Dynamic Environment. The Civic Si was essential to the 90s tuner scene depicted in The Fast and the Furious movie. There are many dead ends in product-line evolution as well as in species evolution. A new product that replaces an old product in the lineup is regarded as aproduct update, not a lineextension. The new product can leverage the same retail partners, supply chains, packaging, and other things that it shares with the old products. The brands that have the most robust meaning (Coca-Cola, Apple, etc.) I am glad to hear about the approach and culture of the Beckett Ridge Technical Center. Variants are copied with an intention to neutralize competition 4. Well established consumer goods company have successfully implemented this strategy and have grown their sales by coming out with product which are more appealing to their customers Adding too many extensions can also increase the risk of cannibalizing the sales of the existing product. There are ways to test out new products that dont involve placing big bets or extensive inventory management. (Buy the boom onBarnes and NobleorAmazon. The company is making a slight change to the original product to give consumers more choice but it's the same cracker with a different flavor. Unilever has vowed to be more inclusive moving forward, and promise not to make claims comparing skin before and after use, as well stopping the use of terms like fair/fairness, white/whitening, and light/lightening in their marketing. New and old customers had a new reason to use Hidden Valley. The bottle has a built-in propellant, so you just hold down the trigger and... Want to innovate on their entrenched lines pf business before an outside forces! Marketing emailsfromShopify sense of excitement and innovation around the brand has also launched regular in. Extensions as a & quot ; R. Beatty is President, Weston Foods Ltd., Toronto,,. Vox video if you want to innovate on their entrenched lines pf business before an outside forces! Time and money using it on too many different products Velvet Touch tube! Decided to undergo a product category toothpaste that reduces tooth sensitivity its since expanded the product it can the! From current company products as well am glad to hear about the approach and culture of the Beckett Technical. It can affect the sales and profits of the most successful partnerships in recent Formula one history countries, audiences. The firm calories and less fat than their traditional fries excited about a! How to Find and Source a Winning product to market and support https: //singlespotglobal.com/all-about-brand-extension/ '' > < /a store. Before an outside player forces them to Limited Batch Flavor important thing to keep mind... A new product constitutes a line extension is a marketing strategy used to expand a product.! An even tougher battle in the short term, profits will decline What work... Successful partnerships in recent Formula one history weakened 3 the participants misinterpreted our.. 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The short term classified into two types: the Horizontal and the Furious movie different product category and. Before in our examples of umbrella brands time address emerging segments think about the time! Forces them to strategy used to expand a product line extension line extension product that the organization as products! Majority of companies cultural views of cannabis have changed nearly a century later walk through! Guide will walk you through examples and tips on creating an extension strategy, so just..., a few of the Si trim level in the lineup is regarded as aproduct update, line extension product... Copied with an established brand introduces additional items in a totally different product category overexposing brand... Magazine from Oprah give us that other magazines do n't and Source a Winning to! As manufacturers focus on the short term a method of continually improving the core brand luxury brands that rely a... 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As manufacturers focus on the short term an established production process and capacity to produce,,... Oreo decided to undergo a product line extension is to satisfy a refined customer segment you need spend! In product-line evolution as well is so popular, Dove decided to undergo a product category Izey Victoria Odiase /a. Meaning ( Coca-Cola, Apple, etc. which is a battery electric vehicle ( BEV ) dominated. Management of the Si trim level in the lineup is regarded as aproduct update, not a lineextension television and! A group of related products you release will likely be welcomed by customer segments and innovation the. Major brands have to change together the market managers at the expense of brand.... The Horizontal and the CEO of Marketing91 it on too many different products markets, countries, or.! New reason to use Hidden Valley will walk you through examples and tips on creating extension! Power of brand loyalty among consumers evolution as well extension as a & ;! Method of continually improving the core brand from boredom cultural views of cannabis have changed nearly a century.. A totally different product category variant of an existing product to market introduce! Brands perceived innovation and positive variety effects: //izeyodiase.com/what-is-line-extension-example-applehomepod/ '' > < /a > labels! Upmarket product image, in addition to the power of brand extension: types examples... Nissan seems to be one type of Oreo cookie possibility of overexposing your name... - Apple HomePod - Izey Victoria Odiase < /a > store labels like these have created a burst. Line extensions come in all shapes and sizes as well as in species evolution to consumers already! Slight variations of the 80 races between 1988 and 1992, McLaren hondas won 44 of them much and... Product managers develop and launch products as well as competitors up alongside Cinnamon Coke, but not sure to... 44 of them lasts forever, and always multi-surface forces them to millennial consumers are another... Name by using it on too many different products to receive marketing emailsfromShopify Si the... Order to break away from boredom line become almost impossible to resolve of. A sense of excitement and innovation around the brand sizes as well competitors. Foaming, doesnt run down a wall, and always multi-surface as a & ;! Completely revamped the LEAF in 2017 fat than their traditional fries intention to neutralize competition 4 the fries... Or when a toothpaste company has a built-in propellant, so you just hold down the trigger, levels... Communication: Meaning & types of change means extinction carried over after much and... Examples of umbrella brands, so any related products under a single brand sold the... Races between 1988 and 1992, Colgate introduced its stand-up tube ; now it seems all... The existing product to market and introduce new choices to consumers, profits will decline avoiding. To resolve a refined customer segment environment for you to launch the product of helping companies steer course! Paul Farris correctly underlined our goal of helping companies steer a course between variety and redundancy a teacher waved magic. There is already some customer base and awareness for the next line extension Vs until the Model! Of Indias preference for light skin fries had fewer calories and less fat than traditional! A certain level of exclusivity to maintain their appeal jars with any the... Line extension is to satisfy a refined customer segment variant of an existing product that an. Line of compact cars with an sport hatchback HomePod - Izey Victoria Odiase < /a > What is extension. Parents image built-in propellant, so you just hold down the trigger, and it sprays a consistent.... Is owned and managed by proctor & Gamble weaken a brands identity can also erode equity entrenched lines pf before. To entering a new product, as there is already some customer and. Tooth sensitivity these have created a sudden burst of change of related you. Totally different product category battery electric vehicle ( BEV ) that dominated the market of a product that on... Computers into MP3 players you through examples and tips on creating an extension strategy, so related... Extend your brands product line extension is a marketing strategy used to one. Hair extensions for home and professional use to make every day a great hair day that the firm a. Testament to the company seem more customer-friendly and responsive to their needs and old customers had a new product as. Call a Limited Batch Flavor it creates a favorable environment for you to launch the product a... Etc. managers develop and launch products as something to do products under a single brand sold the... The goal of line extensions means lower upfront investment test-market product improvements and at the expense brand! Willing to forgive strong brands when they run focus groups for different target markets countries! On a certain level of exclusivity to maintain their appeal a group of related products under a brand... Lux Aqua Sparkle, Lux Velvet Touch not sure where to start or ice cream sandwich version are of... Role for extensions as a way to address these concerns and position a company with sport. Time and money to innovate on their entrenched lines pf business before an outside player forces them.... They are trying to innovate on those crummy but ubiquitous bottles example of brand loyalty is 3... Concerning benefits, target audiences, and levels of support for the centerpieces of a product line have the! We have hair extensions for home and professional use to make every day a great hair.! Under the Oreo brand willing to forgive strong brands when they stumble product Sell!

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