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Basically brand and product line extension is a need of company when he wants to provide a variety of products in the same category of the product line, but every company cannot do this with out getting resoures, and proper marketing research, it increases the companies presence in the competitive market as well as the turnover of the company in monitory terms.
Brand line extension explanation:
Brand line extension is introduced by the company through its established product through its brand name, just like in the category of the pampers, which is the product of the unilever they have make extension in it, introduces a new product which is pamper ultra leakage, it has distinct features, while the category is same and the extension depend on the recognition of the brand name. Fifty percent of the companies each year launch product line extension, worldwide which has make it famous, but the strategies of the companies for the product line extension varies which is mostly depend on the existing products. it reduces the risk which is allied with the new product development, because of established brand name of the product which is already has good will in the market.
In the result the cost of the product reduces, cost like promotion cost, marketing cost, due to its already presentation in the market and its goodwill, more products will show the more presence of the company in the market.
consider Suzuki is the well establish company in the Pakistan ,recently they have launch their new product name Suzuki Swift, due to well establish company they got success in launching of the Swift and increase the volume of the sales, because customer knew them already which benefited them in saving the promotional costs.
Firms that have more products that have more potential customers, they have more chance to sell more and more to each customer in a result it increase the efficiency in marketing and production sector which increases the profit of the product line extension.
Brand line extension does not suits every company, A brand line extension strategy is not for every company. For making best decision in the expension of brand line extension the answers of the following questions must be determined.
1: Company will develop a product extension with features that clearly differentiate it from its already developed product in the market?
2:These features are really need to the customers?
3:Our company can do this mean it has resources to do this or to develop different product?
4:It will cover the cost of the promotion after making the sales of extended product?
For the successful launching of the brand line extensions it is not important to launch or manufacture the totally new product, it must related to the old or established product of the company.
Benefits of the line extension:
1:It expands the presence of the company in the market
2:It increase the potential customers.
3:It gives the more variety of products for customer according to their taste an wants.
4;Cuts costs related to the promotion
5:As a result, it increases the company profits and turnover.
Threats of the product line extension:
1:If it fails to attract the potential customer, then it may effect or damage the established product of the same brand of the company.
2:Product Line Extension Strategy
Product Line Extension Strategy
A product line is a combination of products that have same functions. In this we offer different and many products to the customers, according to their choice and demands, and make strategy according to the customer, which allow company to target maximum customer. The best product line extension strategies capitalize on the success of existing products and enhance the brand image of your products.
We can extend our product line extension in the different sizes. if we are seller of the consumer goods then we must offer it in different packing, like in small, medium and large sizes, it may attract consumer due to its size and packing, small sizes can be convenient and can be placed in the stores.
If we are selling a durable goods the we have to create products which has wide range for individual, and it helps the organization to achieve their target.
It always should be done nominal variations as an product extension which are closely the end of their life cycle. By introducing new colors , ingredients and updating the product the market can be captured.
The product line cam be extended naturally through making it different in quality. Target each customer from lower level to the upper level means in terms of cost, offer lower cost product and also high cost products, as well as the high quality and the low quality. These ranges of costs helps to target the customers according to their income levels, it is very helpful in increasing the goodwill and the prestige of the company. for example if you sell the beauty soap then it must have prestige product, standerised product and the economical product for the customers. If we will offer multiple products then their will be less room for the in competitors in the current market.
Brand and product line extension Shows the strength of the organization and its efficiency and growth, brand is the strong strength of the company that effect the line extension but some times line extension effects the brand goodwill.