Product Extension
This article covers meaning & example of Product Extension from marketing perspective.
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.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
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