Posted in Marketing and Strategy Terms, Total Reads: 727
Definition: Product Extension
Product extension is a type of branding strategy. The product extension is also known as line extension where a parent brand covers a new product under a product category it currently serves with new color, sizes, pack size and forms.
Well established consumer goods company have successfully implemented this strategy and have grown their sales by coming out with product which are more appealing to their customers
Adding too many extensions can also increase the risk of cannibalizing the sales of the existing product. Risks can also go up if a new product launched under a brand name does not get accepted well by the customers which can cause the entire brand to dilute its appeal
Companies must do a thorough market research in order to identify if there is a need for a new product under the same category and most importantly the value proposition should be different in order to avoid cannibalization
Multiple examples exists, Levi’s have introduced many designs, styles and fits for its jeans category in the market under the same brand name Levi’s Strauss.