Line Extensions
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
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
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 Hardie, Lodish, Kilmer, Beatty, Farris, Biel, Wicke, Balson, & Aaker 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/ Kennedy, E 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/ Tugend, A 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