Line Extension and Brand Extension

Line Extension
  • A product line extension is the use of an established product brand name for a new item in the same product category.
  • Line extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavours, forms, colours, added ingredients and packet sizes.
  • For example, A soft drink manufacturer might introduce a “Diet” or “Cherry” variety to its cola line, while a toy manufacturer might introduce new characters or accessories in its line of action figures.
  • In short, line extension adds variety to its existing product for the sake of reaching a more diverse customer base and enticing existing customers with new options.
Source: http://bit.ly/2fUCAxC
Brand Extension
  • Brand extension is the scenario when the firm enters a new product category under the umbrella of the original brand name which is called as the parent brand. Brand extension is usually done in related categories.
  • It helps in leveraging the existing consumer base and loyalty that the brand name commands to bring in greater profits. However, extreme care needs to be taken before experimenting with it as the failure or shift from the brand’s core values in the new category can adversely affect the parent brand.
  • For example, Dove which was earlier in the soap category has also come up with Dove Shampoo which is entirely a different category called hair care.
Source: http://bit.ly/2wrmFwX

 

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