Question: Marketing When A Company Uses A Product Line Extension, It?

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What is product line extension Marketing?

A product line extension is the use of an established product brand name for a new item in the same product category. 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.

When should a company go for product line extension?

Increases Customer Loyalty Unless you are selling products with a short shelf life, such as food, then at some point, your loyal customers are going to have enough of your product. Expanding your product line gives them fresh opportunities to engage with your brand. This works on two levels.

What are the examples of product line extension?

A product line extension is the launch of a new product in a product category where the brand already sells products. Successful Examples of Line Extensions:

  • Colgate with Hemp Seed Oil.
  • Coca-Cola Cinnamon.
  • Lux White Impress.
  • Honda Civic Si.
  • Hellmann’s Mayonaise with Olive Oil.
  • Mr.
  • Nissan Leaf.
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Why do firms use product line extensions?

Why are brand line extensions important? Brand line extensions reduce risk associated with new product development. Due to the established success of the parent brand, consumers will have instant recognition of the product name and will be more likely to try the new line extension.

What is brand extension with example?

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. An example of a brand extension is Jello-gelatin creating Jello pudding pops.

What are the 4 product line expansion?

There are four “stages” of the life cycle of a product: introduction, growth, maturity, and decline. The launch is exciting and is often followed by a surge of sales, but at some point, the product will wear itself out.

What are the disadvantages of product line?

High Risk. The major disadvantage of a product specialization strategy is that a narrow product line puts you at high risk. For example, suppose a retail store decides to offer only low-cost shoes. There is an ever-present danger that a significant market shift will jeopardize the company’s single profit stream.

What are the four product market growth strategies?

The Product Market Expansion Grid offers four main suggested strategies: Market Penetration, Market Development, Product Development, and Diversification.

What are good reasons for product extensions?

Extending your product line has several strategic benefits including increased profits, customer loyalty, and brand visibility.

  • Line Extension vs. Brand Extension.
  • Line Extensions are More Cost- Effective than Brand Extensions.
  • Brand Extensions Increase Customer Loyalty.
  • Brand Extensions Increase Your Visibility.
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What is an example of a successful brand extension?

In the best examples, the brand extension is natural and arises from a recognized positive quality of the original product. Arm & Hammer produces a deodorizing cat litter under its brand name. Black & Decker makes a line of toy tools for children. Ghirardelli Chocolate Company sells a brownie mix.

What is an example of extension strategy?

For example, a business could try introducing a different sized version of the product. Increasing marketing activity – Running new advertising campaigns and sales promotions can attract new customers, remind previous customers that the product still exists and encourage existing customers to buy more of the product.

What is an example of product line?

Examples of Product Lines For example, Starbucks may have product lines such as coffee, tea, and snacks. At a Nike (NYSE: NKE) store, product lines may consist of basketball, soccer, and golf. Under each sport product line, there may be sub- product lines, such as footwear, clothing, and sporting equipment.

What are the risks of line extension?

Risks associated with line extensions

  • Expanded line without any clear cut role leads to confused customers and confused retailers.
  • Brand loyalty is weakened.
  • Variants are copied with an intention to neutralize competition.
  • The relationship between the marketer and trade partners gets strained.

What are the 4 steps in product development?

The 4 steps in new product development process to turn your idea into a product

  • Ideation and Research. Every great product was once just an idea, an itch, a frustration the founder had with the existing status quo.
  • Strategic Planning.
  • 3. Development and Testing.
  • Launch and Commercialization.
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What are the advantages and disadvantages of product line extension?

It makes acceptance of new product easy.

  • It increases brand image.
  • The risk perceived by the customers reduces.
  • The likelihood of gaining distribution and trial increases.
  • The efficiency of promotional expenditure increases.
  • Cost of developing new brand is saved.
  • Consumers can now seek for a variety.

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