Line Extension Overview & Examples What is Line Extension? Video & Lesson Transcript

Once a company has a successful brand, expansion is going to be almost inevitable. It’s important to weigh the benefits of extensions and see if a product line or brand extension would be the most profitable. An example of a line extension is when a company makes a new product that is slightly different from an existing product. As an organization grows, extensions go from a luxury to a necessity.

Since most vendors offer them for free , there is no reason not to give them a try in your organization. Another excellent use for phone extensions is to track and analyze call patterns, specifically for customer-facing departments like sales or tech support. Whether or not you have dedicated teams for each product line it is still useful to see which products need more support and why. They allow employees to work from multiple locations or even on the road as necessary. For example, an employee may have a desk phone in the office, use a laptop at home, and a cell phone while traveling.

• The company was granted an extension allowing it to continue using the old trains for a further three months.
• As you have seen, extensions don’t differ much from phone numbers from a user standpoint.
• The brand launches its new line of products with much fanfare and marketing gimmicks.
• These are the guides you’re looking for on how to install, set up, and use Wiser.
• Thanks to social media and online advertising, businesses can run several campaigns side by side.

The Honda brand has benefitted from a reputation of being fun-to-drive and a brand association with racing. The soap has been marketed as a premium, feminine soap for a century, and has builtbrand associationsto France, movie-stars, and glamour. They have an innovation SKU they call a “Limited Batch Flavor.” As of writing this, the flavor is Pucker Upper Sorbet. They also encourage customers tovote on which flavor to bring back; this is akin to our guide to fold the innovation SKU into the main line if it is well-loved. Both it’s oil and fibers have excellent technical properties and can be made into many products.

If we swap a bather’s shampoo from a mint-scented one to a lemon-scented one, that wouldn’t be a problem. If you swapped someone’s shampoo for conditioner, then they cannot wash their hair. The company may notice strong growth opportunities as mass retailers such as Wal-Mart, Best Buy, and others attract a growing number of shoppers who want value-priced goods. Then, you will have to build the offering in a way that will appeal to them. Below we define both marketing concepts, compare and contrast them, and break down ways that you can get the data you need to move forward with these strategies effectively. Retail Intelligence Actionable insights for brands and retailers, collected by the crowd.Retail Execution Management Sales and workflow optimization for field teams and merchandisers.

Nissan Leaf

Additionally, some illnesses don’t mean your employees can’t work but they may be contagious so you don’t want them coming into the office. Working from home means staff can keep working without spreading illness. Traditional advertising campaigns have generally used mass media to reach their audience. But today’s ad campaigns are more targeted to different sub-segments of the market and are often tailored to fit specific criteria.

Extensions are short numbers that you can assign to an individual employee, a team, a department, or a division of your business. It is an internal code enabling users to reach their colleagues quickly and easily. Your customers can also bypass the normal auto-attendant by dialing the extension number of the person they want to talk to. Hearst Newspapers participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites.

They have a lot of their money invested in the line extension meaning and are risk-averse. The new product was a failure, and they were removed from the menu less than a year after launch. Burger King failed to explain the advantage of Satisfries, so customers wondered why they would pay more for french fries with a different name. Health-conscious diners would order a side salad rather than the ‘less-bad for you’ french fries. In 1997, Nissan experimented with theAltra, a sizeable electric wagon or van, but it only sold a few hundred in Japan and the United States. In the same year, Nissan released the Hypermini, which was a tiny commuter car for the urban market in Japan.

You don’t have to change anything, their current extension will still work even if the physical location changes. If you have department extensions, you can update an employee’s number if they switch divisions or get a promotion. Phone extensions have been around for a long time, the feature is almost as old as landline technology.

A skin soap with exfoliants and whiteners for people who value having fairer skin. Unilever India extended their line of soaps with a promoting lighter skin. Coca-Cola extended their line of soft drinks with a seasonal cinnamon flavored version. But nothing lasts forever, and cultural views of cannabis have changed nearly a century later. Marijuana is now being legalized in many regions, and many people have a favorable view of hemp. In the a classic case of “throwing out the baby with the bathwater,” hemp and it’s usefulness got tossed out too.

Your staff needs to communicate with you, with each other, and with your customers. When weighing on your next step towards profitability, a rather experimental approach will help you address the challenges with as little risk as possible. Risk is definitely involved in every business, but such measures during line extension help control and manage risk effectively. With the Product Line Extension approach, the company can appeal to diverse sectors of customers that like the product in multiple versions such as form, color, taste, and more.

Add line extension to one of your lists below, or create a new one. A line extension of lower quality is called “trading down” or “down-market stretch”. Or maybe the current pandemic has forced your teams to work remotely for the foreseeable future. Many offices are experimenting with hybrid workdays where some employees come in for part of the week only. Others may work mostly from home, coming in for training or meetings.

Benefits of Extending a Brand

With their popularity, the company continues to undergo product line extensions. Now Oral-B has Bluetooth, electric, battery, and kid’s toothbrushes. A line extension is when a current brand name is used to enter a new market segment in the existing product class, with new varieties or flavors or sizes. One option is to use phone extensions, especially if you want potential customers to call in. Suppose you are trying out 3 different ads on social media featuring various celebrities.

Product line extension increases the amount of different products available to consumers, and through adding more products into the market it keeps consumers interested. Investing in this approach is commonly pursued by companies due to their desire to create revenue and to advance their competitive status against rival companies. Product line extensions are fairly low risk because you already have a successful brand. But, you don’t want to overexpose your brand to the point where consumers are confused about what types of products you offer.

Ever wonder why there are so many variations of something as simple as peanut butter? Because every one of those SKUs takes up a space that a competitor can no longer take. I don’t blame Burger King executives; this is probably a failing of the franchise model. Franchise businesses have trouble rolling out product changes because the franchisees push back. This is in stark contrast to corporate-owned stores, like Starbucks, which have far more control over their operations.

Product Line Extensions: What They Are, Examples, and Tips for Forming Your Strategy

Issues facing product line extensions can include company’s investments in the new products without the desired return. The product may come at a loss or may not be able to make enough of the return the company was forecasting for. The new addition could also send confusion to the company’s customer base, and in turn negatively affect the loyalty they have for the brand. A brand extension is when a company uses an existing brand to create new product categories. This gives a company the chance to extend its brand with recognition from the existing products. For example, Oprah extended her brand by launching a magazine and a television network.

The company can extend its product line down-market stretch, up-market stretch, or both ways. You are looking to add slightly different products to this brand. With a brand extension, you are venturing into other product categories. Brand extension refers to the expansion of the brand itself into new territories or markets. For instance, if a soft drink manufacturer unveils a line of juices or bottled water products under its company name, this would constitute an example of brand extension. The brand, or company, is an established name, and so the name alone can serve to drive customers to try new products completely unrelated to the older product lines.

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. Customers will freeze when they are presented with too many options, and it will result in a poor experience and go elsewhere next time. But the real mistake was not replacing the regular menu fries with Satisfries.

You need an office to provide services to your customers but you don’t know if sales will be sufficient to justify opening a new branch. Having a local presence is important to many people and potential clients may balk at trusting an outside company. Line extension refers to the expansion of an existing product line. For instance, a soft drink manufacturer might introduce a “Diet” or “Cherry” variety to its cola line, while a toy manufacturer might introduce new characters or accessories in its line of action figures. In short, line extension adds variety to its existing product for the sake of reaching a more diverse customer base and enticing existing customers with new options.

Where To Buy Configurable widget to connect your shoppers to in-stock products. Any opinions in the examples do not represent the opinion of the Cambridge Dictionary editors or of Cambridge University Press or its licensors. Similarly, the timeline of construction of the south line extension was also pushed up several years due to increasing population and traffic volume.

The brands can use this trust to introduce new products that will most likely be accepted. When Starbucks started offering energy drinks, it was an extension of the brand because now people will relate Starbucks to energy drinks and coffee. However, if the company had launched a new type of coffee, it’s still coffee. So, in this case, it’s an extension of the company’s previously available line of coffee. There are different brand extension strategies, so it’s important to know which project will positively impact the customer base.

Grocery store shoppers are now looking for simple, recognizable, and understandable words in the ingredients label. However, abrand extensionis when an existing brand offers a new product in a product category the brand has never competed in. Brands can adjust pricing to coincide with trends within the economy, to ensure the luxury goods do not lose too much of their consumer demand within their most popular market segments. A product line extension is the use of an established product brand name for a new item in the same product category. The other side of the coin, brand extension, is a complete departure from the core business. But if the new line is perfectly aligned with the brand and what customers want, then it can pay off handsomely.

Coca-Cola also launched a product, Tab Clear, with the sole purpose of confusing the buyers of Crystal Pepsi. Coke’s product was a diet soda with artificial sweeteners, which cut right against Crystal Pepsi’s brand image of being natural. Executives at Pepsi were committed to packaging the product in a clear bottle despite the warnings from their food scientists. The clear bottle ultimately made the drink spoil in direct sunlight, much to the disgust of the customer who tried to drink it. I am glad Unilever is taking steps to improve their marketing so that people aren’t left hating their natural appearance, but I do no condemn them for providing products that were demanded by the market.

It requires extensive studies about the client base and the new product. A brand extension needs to feel natural to the customers, or it may alienate them and cause brand dilution. With the product brand already established in the market and the minds of consumers, the company may save money on marketing and advertising for the same category’s Product Line Extension. A brand extension entails increasing the company’s presence into new product categories where it is less well-known. When a brand introduces a version of an existing product to target new client categories, this is referred to as a line extension.

If you decide to branch out significantly with a brand extension, you might want to do a big in-store push for the launch. But if shoppers don’t respond to end cap displays in certain retailers where your products are sold, you’ll want to know that before you sink dollars and effort into getting them set up. Just as there are notable brand extension failures, there are also big wins that must be noted.

However, cheaper products may draw attention and demand away from a brands upward product line extension. A way to combat this is to increase the quality of the brands luxury goods, as well as targeting aspects of the consumer market that are able and prepared to pay more for the higher quality product. However, when introducing downward line extensions, consumers may be opted to by this cheaper option the brand is providing rather than their upward line extension goods. This introduction may negatively affect the sales of their premium and more luxury goods. So while demand and increased market share may be a positive to downward line extensions, the approach may disadvantage the brands overall profit. When extending the product line downward, the new product or products become more available to consumers and most likely, cheaper.

The https://1investing.in/ Line Extension can be in the form of new colors, forms, shapes, sizes, flavors, packaging, and ingredients. You have done a really good study on different brands and their strategy. I consulted for a franchised national pizza restaurant, and we had to market the menu changes as much to franchisees as to end customers. 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. A survey or a focus group would have highlighted the confusion for executives. Zero Emission is the technology branding that Nissan used to differentiate the LEAF from the popular Toyota Prius, a more efficient car, but still emitted CO2 and other pollutants that the LEAF does not.