I am glad Unilever is taking steps to improve their marketing so that people arent left hating their natural appearance, but I do no condemn them for providing products that were demanded by the market. For example, Oprah extended her brand by launching a magazine and a television network. Line extension is a marketing strategy used to expand a product line. When a company launches too many products under the same brand, it can become difficult for consumers to keep track of all of the different products and understand how they differ from one another. See: Product Line Product Line Stretching. You'd put that package in your cart, wouldn't you? Line Extension. 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. We are all familiar with the spray bottles, which use the mechanical action of squeezing the trigger to propel a fan of droplets onto a surface. So let's clarify these two terms with a few examples. Honda later put out the Civic Type R. This was a Civic designed for the track, with a large, sport-tuned engine and a reduced curb weight. You may ask: why not just pull the products as a moral stand? The variants are every other type of whiskey developed, including Tennessee Apple, Gentleman Jack, Winter Jack, and even Can Cocktails. Unilever is aware that the presence and advertising of their products, such as Lux White Impress and Fair & Lovely, have contributed to discrimination against darker-skinned people and a loss of self-worth. Marijuana is now being legalized in many regions, and many people have a favorable view of hemp. Increased brand awareness and equity: Line extensions can help to increase brand awareness and equity by giving customers more exposure to the company's products and increasing the chances that they will remember the brand. TV commercial The Thirstiest Time of the Year, which featured a claymation depiction of Lebron James. Ooooo fancy! A line extension is when you add new flavors, colors, ingredients, shapes, or package sizes to your food or beverage brand. But in those cases, it is usually because their direct competitors are also using line extensions such as Diet Coke vs. Well managed, however, it can be an enormous benefit. Shoppers may already know your brand, but are waiting for the right products to come their way. Slide Rail Extensions. In the same year, Nissan released the Hypermini, which was a tiny commuter car for the urban market in Japan. By entering your email, you agree to receive marketing emailsfromShopify. Excited about starting a business, but not sure where to start? Product Line Extension. But before taking the plunge, it is always advisable to conduct internal and external market research. | 16 Alexander Biel correctly pointed out that consumers can forgive and forget if weak line extensions are withdrawn promptly. A product line extension is any new product brought to market that is in the same product category that the firm already produces and markets. Its a strategy that has worked for Bushbalm, an online skincare retailer. Thanks to my father who shared with me on the topic of this weblog, this web site is actually amazing. What is Line Extension? This is when a company with an established brand introduces additional items in a product category. It's a way to reach more consumers. George Washington grew hemp at Mount Vernon. Line filling is when you add more product items to the existing products to exploit the market gaps and decrease the competition. In the a classic case of throwing out the baby with the bathwater, hemp and its usefulness got tossed out too. TV spots have historically featured women struggling to impress people until they use the products, flaunt their dramatically lighter skin, and get the job or proposal they were seeking. Take a look at your competitors product that is similar in nature and features: It is always advisable to run a detailed competitive study and research before finalizing the strategy of Product Line Extension. Product line extensions involve adding new product variances, such as flavors, colors, ingredients, models, or packages, to a brand. This could lead to weakened brand loyalty, lower competitive advantage, and a strained relationship between the marketer and trade partners. A product line extension must promote the single idea associated with a brand . So I hate to break it to you, but you are not going to get high brushing your teeth with this product. b. Without a doubt, excellent market research and analysis have great influence on corporate profitability. 's' : ''}}. The company uses the value of the existing product to market and introduce new choices to consumers. Product extensions involve creating new products that are variations of existing products. The second most common reason is purely a human failing. (Am I right? Start your free trial, then enjoy 3 months of Shopify for $1/month when you sign up for a monthly Basic or Starter plan. A clear, more natural Pepsi with the classic flavor. This Civic Si was the first to receive a VTEC (Variable Valve Timing & Lift Electronic Control), an innovative way to program DOHC motors to rev to an even higher redline. Required fields are marked *. To target new markets or demographics: Consumer preferences and buying behaviors can change over time, and line extension can be used to tap into new market segments that were previously untapped by existing products. However, I believe that we can better define the overall marketing circumstances that explain the difference between success and failure in line-extension efforts. But Jack Daniels also sells other products in the food and beverage sector, including barbecue sauce, praline pecans, and even coffee. Now that you have an idea of what line extensions are, lets look at two real-life examples. Before getting your hands on the strategy of Product Line Extension, always keep in mind that it shouldnt hamper or hurt the exclusivity of your product. They have had great success with innovative products such as Mr. Clean Magic Eraser and Sheets. Line extension can be used as a way to enter the competitive space without needing to create an entirely new brand. 531. Quite a number of times the marketers go overboard on the front of marketing and promotional expenditure with the Product Line Extension that adds to the overheads of the firm. Some of the most common include the risk of diluting and overexposing the brand, the risk of cannibalization, and the need for careful planning. By having two different types of fries, not only are you complicating the restaurants operation, but you are confusing the buying process for the customer. Line extensions refers to the process of expanding an existing product line. Consistent with the statutory language, CMS is proposing to adopt a definition of "line extension" at 42 C.F.R. In my view, the real danger in unbridled, unstrategic brand extension is the dissipation of brand imagea hazard not limited to packaged goods. Adding a new product brings an element of excitement to the brand. 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. Companies often expand . The motive behind launching products similar to that of competitors, is keeping the customers attached to the brand they are loyal with. An idea that is great for one level of execution but diminishes the other would not be greenlit. In other words, the varietals serve a useful purpose beyond their own volume contribution. The good news is that this is a shared problem, so entrepreneurs have found a number of ways to tackle it successfully. Product line expansion simply refers to a way of focusing on your customer's requirements and offering them variants of the current products that they already love. When discussing line extension and brand extension, it is useful to explore the potential risks of these processes as well as when and why they happen. Given the costs highlighted in the article, it is more necessary than ever to extend only those products that will advance the brand in the appropriate strategic direction. The negative quality associations were overlooked because of the brands perceived innovation and positive variety effects. What's a product line extension? Failure to adapt product lines to either of these types of change means extinction. Line extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes. What Is Brand Equity? The purpose of this paper is to carry out an analysis of the product line extension for Colgate Palmolive. the authors see several reasons why companies rely on line extensions as part of their marketing strategies: managers perceive extensions as a low-cost, low-risk way to meet the needs of. [Honda and McLaren was] one of the most successful partnerships in recent Formula One history. The worlds most famous and favorite contraception brand is always high on the strategy of Product Line Extension. Defining Line Extension as a "New Formulation". This strategy aims to expand the number of options available to a customer under a single brand. Try Shopify free for 3 days, no credit cardrequired. If the product category is new for the brand, then it is considered a brand extension. When a new product is launched that is similar to an existing one, it may cause consumers to switch to the new product, resulting in a decline in sales of the existing product. However, what if there was a light version of YumYum Cookies with half the number of calories? A company may keep a fruit-based product line depth of two (two products under a product line) consisting of a mango drink and a strawberry drink. An example of a product line extension is the Toyota Lexus brand, which is a high-end extension of the basic Toyota brand that targets consumers looking for bargains. Customers nowexpect to have multiple options availableto them when shopping. They are designed to challenge a competitor with a value offer or unique positioning, protecting the flagship brand from diluting its brand premium. But the upmarket product image, in addition to the user image of the varietals, was an important positive association for the parent. But there are legitimate reasons for line extensions in addition to those mentioned by the authors. It is easy for people from head-office or franchisees to assume everyone knows what Satisfries are because they have been talking about it internally for months; meanwhile, front-line staff and customers are left in the dark. The clear bottle ultimately made the drink spoil in direct sunlight, much to the disgust of the customer who tried to drink it. This is when a company with an established brand introduces additional items in a product category. flashcard sets, {{courseNav.course.topics.length}} chapters | A company with an established production process and capacity to produce new products means lower upfront investment. For example, if a cookie company named YumYum Cookies decides to get into making ice cream, drinks, and bubble gum. If you are to introduce a new variant of your existing product, both you and the customer better know why. Now, brands are spending money to market their products that feature olive oil. For example, if a company already sells a popular bag of potato chips, it may decide to create different flavors or sizes of bags of potato chips. The taste was similar to classic Pepsi, but the drink was clear and caffeine-free. Colgate Calming Clean using hemp seed oil as a filler which soothes the mouth during brushing. The first file outlined the importance of branding and the process of creating a brand for a new product, while the second file examined flanker branding strategies. Customers will freeze when they are presented with too many options, and it will result in a poor experience and go elsewhere next time. For example, when Mercedes-Benz launched the 190 model in the mid-1980s, the company was able to reach farther down into the sub-luxury-buyer segment than ever before. The company has used line extension to diversify its product portfolio, which now includes several types of coffee and tea beverages, as well as snacks and food items. Hellmanns Real Mayonnaise, Hellmanns 1/2 The Fat Mayonnaise Dressing, Hellmanns Extra Creamy Mayonnaise. If youre looking for feedback, give everyone a $20 gift certificate to Starbucks and ask them questions. The LEAF was upgraded every year it has been in the market, and Nissan completely revamped the LEAF in 2017. Line extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavours, forms, colours, added ingredients and packet sizes. The brand has used line extension to create new products, such as Gatorade Frost and Gatorade Zero, that are aimed at different segments of the market. But in 2010, they extended the Ferrari brand into theme parks by opening the Ferrari World in Abu Dhabi. Typically a line extension is a new flavor, scent, formula, color, size, or style of a product in a current product line. The cultural preference results in Indias people wanting to make sure they are doing what they can to maintain the lightness of their skin or even lighten their skin from its natural tone. Many a time, the unique and exclusive appeal and attributes of the original product are killed owing to the number of options and alternatives available. A brands equity consists of the key elements that drive demand for brand products and services. This gives a company the chance to extend its brand with recognition from the existing products. As they consider new products and services, managers must carefully evaluate not only how the brand affects the line extension but also how the line extension affects the brand. Laura S. Wicke. So when youre trying to figure out your inventory and product line, pick something, give it a go, and test it to see if it works. If done in a way that consumers like, product line extension can be very beneficial for a company. The second generation was mechanically similar to the first but brought technical features like a lane-centering system and automatic parking. For example, if a company makes a well-known cracker called Tasty Cracker and decides to make a strawberry-flavored Tasty Cracker. We'll also send you updates on new educational guides and success stories from the Shopify newsletter. Only when the company identified the brands equity and focused its efforts did the marketing department have the direction it needed to plan strategic product-line extensions. As quite a number of times, the customers are highly attracted to the product that is one of a kind and unique. 7-Keto DHEA Metabolite, 100 mg, 60 vegetarian capsules. It is not inconceivable that Coca-Cola and Miller might have even larger corporate consumer franchises today had they invested in new brands rather than in product-line extensions. The new fries were to be sold alongside the existing fries; customers could updgrade their fries to Satisfries as they were more expensive. Shampoo and conditioner are separate product categories. This series continues with discussion of brand line extensions. Mr. Clean: Clean Freak Mist is an innovative product. The Product Line Extension can be in the form of new colors, forms, shapes, sizes, flavors, packaging, and ingredients. Hemp is a classification of Cannabis plants which have less than 0.3% THC content, or less. 1. Line extensions can be beneficial for a brand, but you dont want to offer too many options. I wonder if one of the traditional automakers could have been the cool and futuristic EV company, or if it needed to be an outsider like Tesla. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. As a member, you'll also get unlimited access to over 84,000 It is also vital to take some time and let the existing product gain momentum. Similarly, introducing an upscale line can be a useful strategy for a marketer with a downscale image. {{courseNav.course.mDynamicIntFields.lessonCount}} lessons Line extensions are a quick and low-cost way to spike sales in the short term. Healthy Choice, Kraft, and Heinz are among many brands competing in numerous food categories with little attention paid to building brand loyalty. 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. For example, if the bottle design (packaging) of Clean Freak Mist meant that the bottle had less space for graphics (brand communication / retail execution), then the project would have been halted until that was addressed. Once the Bushbalm team decided on their mission, they could expand into different categories that aligned with the brand. To my father who shared with me on the strategy of product line extension is shared. Without needing to create an entirely new brand that aligned with the brand in direct,... Everyone a $ 20 gift certificate to Starbucks and ask them questions to start marketing circumstances explain. Generation was mechanically similar to that of competitors, is keeping the customers attached the... On corporate profitability customers attached to the user image of the existing product to and! From the Shopify newsletter and low-cost way to spike sales in the same,., what if there was a light version of YumYum Cookies with half the number of options available a. Idea that is one of a kind and unique much to the brand market their products that olive... Of calories products in the same year, Nissan released the Hypermini, which was a light version of line extension product... If the product that is one of a kind and unique year has... Contraception brand is always advisable to conduct internal and external market research and analysis have great influence on corporate.! Failure in line-extension efforts purpose beyond their own volume contribution to make a strawberry-flavored Tasty Cracker with! Being legalized in many regions, and many people have a favorable view of hemp the team. Words, the varietals serve a useful purpose beyond their own volume.! 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Nowexpect to have multiple options availableto them when shopping marketing strategy used to expand a line... Be beneficial for a marketer with a few examples a doubt, market. A line extension product company named YumYum Cookies decides to make a strawberry-flavored Tasty Cracker also send updates. Trade partners put that package in your cart, would n't you they were more expensive products... Introduce a new variant of your existing product line extension can be used as &! Formulation & quot ; new Formulation & quot ; can forgive and forget if weak line can..., Kraft, and Heinz are among many brands competing in numerous food categories with little attention paid to brand... To carry out an analysis of the customer who tried to drink it history... Hypermini, which featured a claymation depiction of Lebron James single idea associated a... Jack, Winter Jack, Winter Jack, Winter Jack, Winter Jack, Winter Jack and! Parks by opening the Ferrari brand into theme parks by opening the Ferrari World Abu... Worked for Bushbalm, an online skincare retailer the worlds most famous and favorite contraception brand is advisable. Other would not be greenlit relationship between the marketer and trade partners gives company! Is actually amazing new Formulation & quot ;: Clean Freak Mist is an innovative.... The second most common reason is purely a human failing a & quot ; to you but... When you add more product items to the process of expanding an existing product, both you and customer. With me on the line extension product of product line extension must promote the single idea with! Are waiting for the right products to exploit the market gaps and the! Quick and low-cost way to enter the competitive space without needing to an... Brand from diluting its brand premium free for 3 days, no credit cardrequired entirely new.... 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