The main idea and agenda behind the same are to increase the sales and reach of the already established product at the market place.
Examples of Product Line Extension
1) Coca Cola:
Over its successful and vibrant years in the market, the beverage giant has launched various versions such as regular coke, vanilla coke, and cherry coke amongst others.
The main motive behind the same was to offer something or the other innovative to the loyal consumers of the brand with the edge of taste and flavor. Diet Coke is one of the most famous Product Line Extension of the brand.
The brand has also launched regular coke in an array of packaging materials and sizes as well.
The very famous retail famous apparel brand is one of the highly liked and adored brands by fashion lovers all across the globe. It is known for its shades and hues of blue jeans. But its Product Line Extension includes various fits for the various body types.
Right from the narrow bottom, slim fit, comfort fit to baggy fits, and more; Levis has fits for every taste and body type.
The world’s most famous and favorite contraception brand is always high on the strategy of Product Line Extension.
It launches its condoms in the various flavors, textures, and types keeping the interests of the customers alive with them waiting for the new arrival of the same product category.
The brand launches its new line of products with much fanfare and marketing gimmicks.
Merits of Product Line Extension
- When the firm comes up with the business strategy of Product Line Extension, it attracts the same line of the target audience who are looking out for a variety in the product category. The strategy elevates the excellent levels of customer service and overall satisfaction.
- With more number of products in a similar line and type, the brand gets more shelf space in the retail stores. This enhances its market reach and market share, along with the benefit of brand enhancement.
- With the product brand already established in the market and the minds of the consumers, the firm can save its marketing and promotional expenditure on the Product Line Extension of the same category.
- The firm earns a competitive advantage in the market against its contemporary brands as is able to serve the consumers with a wide array of options. The options can range from flavors, shapes, sizes, price, packaging, and much more.
- With the strategy of Product Line Extension, the firm is able to cater to the different segments of the customers that prefer the product in other variants such as shape, color, flavor, and more.
Demerits of Product Line Extension
- Many a time if the firm is not well researched about the market dynamics and the evolving tastes of the customers, the Product Line Extension can backfire and affect the sales and brand value of the original product.
- Quite a number of times the marketers go overboard on the front of marketing and promotional expenditure with the Product Line Extension that adds to the overheads of the firm.
- If the Product Line Extension if not very well received by the target audience, it affects the brand loyalty and value of the original product.
- Many a time, the unique and exclusive appeal and attributes of the original product are killed owing to the number of options and alternatives available.
- The competitors of the brand also pull up their socks and come up with the strategy of their Product Line Extension in order to stay relevant in the market. And if the competitor’s products range better in terms of features and attributes, it can affect the sales and profits of the firm.
Vital considerations before indulging in Product Line Extension
1) Check the growth and progress of your existing product:
Before finalizing the strategy of Product Line Extension, it is always necessary to check how your current product is performing in the market. Consider the factors such as market growth, sales, profits, return on investment, and market share as compared to the products of the competitors in the market.
It is also vital to take some time and let the existing product gain momentum. Aftermath gauges its market performance and then decide if you want to go ahead with the Product Line Extension.
2) Ask your customers:
Asking your customers before taking a plunge into the Product Line Extension is one of the most significant decisions. Always ask your customers if they are happy with your product offering and if they want any sort of changes or alterations in the same.
Also, ask them what the specific features are and attributes of the product that attracts them the most and makes them finally purchase the product.
It is also very crucial to ask them if they are actually looking for any sort of variations in the product in terms of color, shapes, flavor, size, packaging, and more.
The firm can conduct surveys with the customers on a one to one basis or through the digital mediums. And the data collected works quite handy and useful before deciding the next manufacturing and product formulation strategy.
3) Take a look at the competition:
To stay relevant and successfully survive and thrive in the market, it is always necessary to keep a thorough check on the competition and their ongoing business activities.
And the same case is applicable whilst deciding on the business strategy of Product Line Extension.
Take a look at your competitor’s product that is similar in nature and features:
- What are their unique features and attributes?
- Do they have variants for the same?
- If yes, what are the features and attributes of the variants and how much type of variants they have?
- If no, what is the reason?
It is always advisable to run a detailed competitive study and research before finalizing the strategy of Product Line Extension.
4) Have a look at your finances and available resources
Apart from conducting external research such as competitive and market study, it is also very imperative to conduct internal research as well.
Have a look at your finances to check if you have extra funds in hand to launch a Product Line Extension.
Have a look at your available resources on the front of strategy, ideation, manufacturing, and execution.
Have a look if you have the required expertise, knowledge, and know-how to indulge in the Product Line Extension.
5) The product should remain exclusive
Before getting your hands on the strategy of Product Line Extension, always keep in mind that it shouldn’t hamper or hurt the exclusivity of your product.
If your original and primary product offering is quite unique in nature and you are offering its variants just to stay relevant in the competition can be a bad idea.
As quite a number of times, the customers are highly attracted to the product that is one of a kind and unique.
The business strategy of Product Line Extension is applied and owned by quite many famous brands in the market, and it has worked wonders for them. But before taking the plunge, it is always advisable to conduct internal and external market research.