Product Extension - Meaning & Example

Published by MBA Skool Team, Last Updated: August 25, 2021

What is Product Extension?

Product extension is a type of branding strategy where a parent brand covers a new product under same category it currently serves with new color, sizes, pack size and forms. The product extension is also known as line extension.

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

Product Extension Example

1. 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.

2. Car companies also offer different variants for same car model with different colors, minor features, upholstery etc.

3. Another example is in the smartphone segment where models are launched after few months with more color options and minor features upgrades.

Hence, this concludes the definition of Product Extension along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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