Line Extensions

Topics: Brand, Branding, Brand management Pages: 15 (2834 words) Published: January 8, 2015
Abstract

Line extensions occur when a company introduces additional items with changes in flavors, sizes, and different ingredients in the same product category under the same name brand. Line extensions are a way to increase market share by introducing additional items in the same category from the already reputable brand name. The paper examines the target populations, the purpose for seeking line extensions, the appropriate timing of launching a brand extension, and the success and failures of such ventures. This paper will illuminate several components for adding a line extension and discuss the pros and cons of taking these risks. There are two theories to explore the effects of brand extension. They are Categorization theory and Brand extension Failure Theory. Brand extension literature supports and disputes its line extension success. In conclusion, my paper will establish that although line extensions may initially gain new customers it does not stand the test of time. Too many choices for the consumers cause paralysis and actually hinder them from purchasing.

Introduction
Line extensions are the expansion of an existing product line. For example, the established product will be introduced with new flavors, colors, forms, added ingredients and package sizes. (www.wikipedia.org/wiki/product_line_extension). For example, the corn chip Doritos by Frito Lay now comes in 16 different varieties; from Cool Ranch to Salsa Verde. (www.fritolay.com) More than half of all new products introduced every year are brand line extensions. A brand's extendibility depends on how strong consumer's associations are to the brand's values and goals. The extension is very dependent on the customer recognition of the initial brand name. In the 1990s, 81 percent of new products used brand extension to introduce new brands and to create sales (Keller, 1998).  Launching a new product is not only time-consuming but also needs a big budget to create brand awareness and to promote a product's benefits. The main purpose is to gain more potential customers and offer more variety. Also, to expand company shelf space presence, offer greater marketing efficiency, greater product efficiency, lower promotional costs and have the potentially to increase profits. (www.extension.iastate.edu/agdm). By offering a line extension the company is taking less of a risk than introducing a brand new product. Coke took less of a risk by developing Vanilla Coke. The Coke name is well established and adding a new flavor may add market share and increase profitability. There are several components for adding a line extension. First timeliness of adding this new product, understanding the consumer choice, thinking beyond purchase intent, looking at data for existing product sand is there a consumer driven need for this product? These are all the means necessary for its success. The paper will examine the components of line extensions and theories for success and failure.

Literature Review

In studying more than 300 brand extensions, it was determined that there are 8 types of Brand Extensions. First, a similar product in a different form for the original parent product such a Jell-O pudding pops versus traditional Jell-O pudding. Second, a change in the original product flavor such as Cherry Coke. Third, when a brand owns an attribute of feature that can be extended. For example, the brand name Arm and Hammer stretching to the toothpaste and deodorant market. Fourth, the use of the brands reputation and expertise in the marketplace assists in helping customers choose. Gerber has done a great job adding baby clothes and baby toys to their existing product line of baby foods. Fifth, some brand extensions are a natural fit to adding certain products. For example, Buitoni pasta added tomato paste and sauces to their product line. Sixth, some brand extensions are vertical extensions of what they currently offer to launch...

References: “8 Types of brand extension”. (“Using APA,” 2012). http://www.brandextension.org/types.html
Austin, C
Byron, E. (2011, February 23). “Whitens, brightens, & confuses: Stores stock so many types of toothpaste, consumers are annoyed; some wonder, does brand matter?”.
http://online.wsj.com/articles/SB10001424052748703373404576148363319407354
“Definition of brand extension”. (“Using APA,” 2014). http://www.investopedia.com/terms/b/brand-extension.asp
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Kavilanz, P. (2010, February 10). Dumped! Brand names fight to stay in stores. Money.cnn.com. http://money.cnn.com/2010/02/15/news/companies/walmart_dropping_brands/
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Ries, A. (2009, September 7). Slowly but surely line extensions will take your brand off course. Advertising Age (electronic). http://adage.com/article/al-ries/ries-line-extensions-brand/138797/
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Yandal, L. (2013, February 15). Achieve greater success in product line extensions. [Webinar]. Insights Now Prism Series. 12:00 video: http://www.youtube.com/watch?v=6ormli5flHw
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