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Product Line Extension: Definition, Strategies & Example

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  • 0:00 What Is A Product Line…
  • 1:24 What Is A Brand Extension?
  • 2:20 Strategies And Examples
  • 4:09 Lesson Summary
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Lesson Transcript
Instructor: Beth Loy

Dr. Loy has a Ph.D. in Resource Economics; master's degrees in economics, human resources, and safety; and has taught masters and doctorate level courses in statistics, research methods, economics, and management.

This lesson will define product line and brand extensions. Different types of strategies will be illustrated with examples. These will show how line extension is distinguished from brand extension.

What Is a Product Line Extension?

Think about when you really want that package of chocolate chip cookies. Let's call them YumYum Cookies. As you walk by the display in the grocery store, you pick up a package and look at the food label. You see the number of calories, and you just can't buy them.

However, what if there was a light version of YumYum Cookies with half the number of calories? You'd put that package in your cart, wouldn't you? Making a light version, creating a mint flavor, offering a snack version, and creating a special Halloween orange and black cookie, are types of product line extensions.

A product line extension is when a company creates a new product in the same product line of an existing brand. The strategy for an extension could be a different color or size, and it may have different ingredients or come in different flavors. The company is marketing the value and quality of the existing product line to introduce more choices to consumers.

Product line extensions are fairly low risk because you already have a successful brand. But, you don't want to overexpose your brand to the point where consumers are confused about what types of products you offer. So, it's important to maximize your exposure, but be smart about it. There may be times when a brand extension is a better marketing decision.

What Is a Brand Extension?

A brand extension is when a company uses an existing brand to create new product categories. This gives a company the chance to extend its brand with recognition from the existing products. For example, Oprah extended her brand by launching a magazine and a television network.

Brand extensions do have some risks, even for Oprah. Some marketing experts were concerned that Oprah was out of her league. Both took a large investment of marketing funds to distinguish them from current company products as well as competitors. What does a magazine from Oprah give us that other magazines don't? How is Oprah's television network giving us something different from what we already have?

Oprah's television personality and success eventually carried over after much time and money. When leveraged correctly, products may be readily accepted because of the popularity of the existing types of products. With others, it may take more of an investment.

Strategies & Examples

With a product line extension, you have an existing brand. You are looking to add slightly different products to this brand. With a brand extension, you are venturing into other product categories. Let's look at a few strategies and examples of each.

1. Oreo cookies are well known, and they are beloved by all age groups. There used to be one type of Oreo cookie. Because of the success of the original cookie, Oreo decided to create slight variations of the cookie, all under the Oreo brand. Now there are versions that come in mini, thin, mega, pumpkin spice, golden, white fudge covered, chocolate cream, mint, berry, double, heads or tails, and more. This is an example of product line extension.

  • Oreo has also expanded its brand. The company now offers piecrusts, ice cream cones, and cookie dough.

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