BENEFITS AND RISKS OF PRODUCT LINE EXTENSION
Rapidly developing technologies, changing trends and societal norms affect not only individual’s lives, but also businesses and markets. In the market, most companies are seeking solutions to catch the market’s current trends to reach the people, or at least to survive. These solutions could be varied. They may be related to public relations, promotions, advertising, or they could be product-based or brand-based strategies. One of the product-based strategies is product line extensions. According to Oxford Dictionaries Online, the definition of product line extension is “the addition of a product or service with different features, sizes, prices, etc., to an existing range of products”. For example, Head & Shoulders brand has different variety of products for different user groups, which are anti-hair fall, smooth and silky, clean and balanced and so on, in the one single category that is hair cleaning product. These product line extensions could be very beneficial as well as being risky.
To begin with the benefits, product line extensions meet the different segments’ needs. Products in a certain line sometimes may not attract wide variety of different segments. In these situations, the company could decide to introduce a new product into the market to increase
…show more content…
(1990, July 15). Brand Extensions: The Good, the Bad, and the Ugly. MIT Sloan Management Review.
Cambridge Dictionaries Online. (n.d.). Retrieved December 31, 2014, from http://dictionary.cambridge.org/dictionary/business-english/product-line-extension
Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed., p. 267). New Jersey: Pearson Education.
Quelch, J., & David, K. (1994, September-October). Extend Profit, Not Product Line. Harvard Business Review, 153-160.
Reddy, S., Holak, S., & Bhat, S. (1994). To Extend or Not To Extend: Success Determinants of Line Extension. Journal of Marketing Research, XXXI,
Pride, W & Ferrell, O.C. 2000, Marketing Concepts and Strategies, Boston: Houghton Mifflin, p. 103.
A line extension or a new product line will require additional investment for product development and marketing activities.
Thus new products/line extensions will be based on Allround brand, each one with a unique target market, delivering different value proposition to the respective customer.
For instance, Primark 's products offer customers clothing as a base product, of witch actual benefits are being to be cheap and trendy, and they may have some return policy as augmented benefit in case of defects. Each product may be realised following a new product development process to improve its success rate (Harris and Schaefer, 2015, p.43-47).
To consider the power of marketing execution (e.g., product placement) versus traditional media planning strategy. How does this new marketing approach affect shifts in brand image?
Armstrong, Gary, and Philip Kotler. Marketing: an introduction. 11th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2013. Print.
The principles of marketing (The Times 100, n.d) are a range of processes concerned with finding out what consumers want, and providing it for them. This involves the ‘4ps’ of marketing; price, place, product and promotion. The product decision in any company involves dealing with goods that should be offered to a group of customers (Jobber & Ellis-Chadwick, 2012). Burberry maintains a product line with great width and scope in which their products fall into two main categories; fashion or continuity. Their fashion products are designed to be responsive to fashion trends and are introduced on a collection to collection basis (Burberry, n.d). Continuity products however have life cycles that are expected to last for a certain time period. Burberry also has 3 primary collections; womenswear, menswear and accessories, with the variety of products they can utilize their product mix greatly. Burberry also has...
Armstrong, G, Adam, S, Denize, S, Kotler, P, 2010, Principles of Marketing 5th Edition, Pearson Australia Group, Frenchs Forest
Jobber, D. (2013), and Ellis-Chadwick, F, “Principles and Practice of Marketing, 7th edition.” McGraw Hill.
Armstrong G. & Kotler P. (2007) Marketing: An Introduction 8E Upper Saddle River, NJ Pearson Prentice Hall Publishers
Kotler, J., & Keller, K. (2012). A framework for marketing management. Essex: Pearson Education Ltd.
Petty Ross D. Editor's Introduction: The What and Why of Marketing; American Business Journal, Vol. 36, 1999
Cravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York, NY: McGraw-Hill.
VARGO, S. L. & LUSCH, R. F. 2004. Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68, 1-17.
Product differentiation also can be as the promotion that is the process of distinguishing a product or service from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own products. The example of product differentiation is brand names, strong dealer network, product reliability, image and services. Rejoice use a salon- smooth hair for a “Haba ng hair” (long hair) moment. Image of Rejoice also is different from other product. So, a customer can distinguish from the out looking of Rejoice. They must do the innovation to the product that can attract customer to buy the product. There are many types of Rejoice product that we call the product line and product