Line Stretching
This article covers meaning, types & example of Line Stretching from marketing perspective.
What is Line Stretching?
Line stretching is an expanding strategy by a company where the new products are launched in the same product line but beyond the current product range with some additional or different features. Line stretching can be done down market, up market or both ways.
Types of Line Stretching
The different types of product line stretching are explained as below.
Down Market
A company may stretch down market when it sees strong growth opportunities in value priced goods or if there is a risk of an attack by a low end competitor but it also involves a lot of risk. This is where a company manufactures products for audience who cannot afford the existing product line. Hence, cheaper versions of the products are introduced by the company.
Up Market
A company may stretch up market for higher margins or more growth. However, they may not want to carry the same name when they expand upwards. In this option on product line stretching, a company introduces a premium range of products or service to target the affluent class, who are willing to pay more for premium products.
Two Way Stretch
When the company stretches in both the directions. In this strategy, the company wants to offer products or services across various customer segments which can be lower, middle or upper segments. For this, most companies introduce new product line with a different brand name.
The above image shows the types of line stretching.
Read More
Example of Line Stretching
Some examples of line stretching are as below:
a) Down market: Samsung Galaxy mobile phones are the flagship phones offering smartphones at a premium price. However, the company has also introduced smartphones with lesser features & specifications, making the product cheaper and introducing the product to the lower class segment.
b) Up market: An affordable car brand like Volkswagen also sells cars like Lamborghini & Bentley, Tata Motors offers a premium product line like Jaguar etc.
c) Two way stretch: Marriott hotels are the premium hotels and the same company offers affordable hotel chain like Fairfield Inn. This way the company caters to both middle class as well as the upper class segment.
Hence, this concludes the definition of Line Stretching along with its overview.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
Continue Reading:
