Extension Definition & Meaning

Ever wonder why there are so many variations of something as simple as peanut butter? Because every one of those SKUs takes up a space that a competitor can no longer take. I don’t blame Burger King executives; this is probably a failing of the franchise model. Franchise businesses have trouble rolling out product changes because the franchisees push back. This is in stark contrast to corporate-owned stores, like Starbucks, which have far more control over their operations.

Where To Buy Configurable widget to connect your shoppers to in-stock products. Any opinions in the examples do not represent the opinion of the Cambridge Dictionary editors or of Cambridge University Press or its licensors. Similarly, the timeline of construction of the south line extension was also pushed up several years due to increasing population and traffic volume.

Advantages Of Product Line Extension

You need an office to provide services to your customers but you don’t know if sales will be sufficient to justify opening a new branch. Having a local presence is important to many people and potential clients may balk at trusting an outside company. Line extension refers to the expansion of an existing product line. For instance, 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.

They are more versatile and you can use them in various situations that were not possible before. Call forwarding remains the most important use for line extension meanings but businesses have also started using them in market research, advertising, entering new markets, etc. Secondly, extending into a new product or service that doesn’t suit your current offerings could cause an otherwise great product to fail.

Examples of Product Line Extension

A skin soap with exfoliants and whiteners for people who value having fairer skin. Unilever India extended their line of soaps with a promoting lighter skin. Coca-Cola extended their line of soft drinks with a seasonal cinnamon flavored version. But nothing lasts forever, and cultural views of cannabis have changed nearly a century later. Marijuana is now being legalized in many regions, and many people have a favorable view of hemp. In the a classic case of “throwing out the baby with the bathwater,” hemp and it’s usefulness got tossed out too.

It requires extensive studies about the client base and the new product. A brand extension needs to feel natural to the customers, or it may alienate them and cause brand dilution. With the product brand already established in the market and the minds of consumers, the company may save money on marketing and advertising for the same category’s Product Line Extension. A brand extension entails increasing the company’s presence into new product categories where it is less well-known. When a brand introduces a version of an existing product to target new client categories, this is referred to as a line extension.

Additionally, some illnesses don’t mean your employees can’t work but they may be contagious so you don’t want them coming into the office. Working from home means staff can keep working without spreading illness. Traditional advertising campaigns have generally used mass media to reach their audience. But today’s ad campaigns are more targeted to different sub-segments of the market and are often tailored to fit specific criteria.

Grocery store shoppers are now looking for simple, recognizable, and understandable words in the ingredients label. However, abrand extensionis when an existing brand offers a new product in a product category the brand has never competed in. Brands can adjust pricing to coincide with trends within the economy, to ensure the luxury goods do not lose too much of their consumer demand within their most popular market segments. A product line extension is the use of an established product brand name for a new item in the same product category. The other side of the coin, brand extension, is a complete departure from the core business. But if the new line is perfectly aligned with the brand and what customers want, then it can pay off handsomely.

Coca-Cola also launched a product, Tab Clear, with the sole purpose of confusing the buyers of Crystal Pepsi. Coke’s product was a diet soda with artificial sweeteners, which cut right against Crystal Pepsi’s brand image of being natural. Executives at Pepsi were committed to packaging the product in a clear bottle despite the warnings from their food scientists. The clear bottle ultimately made the drink spoil in direct sunlight, much to the disgust of the customer who tried to drink it. I am glad Unilever is taking steps to improve their marketing so that people aren’t left hating their natural appearance, but I do no condemn them for providing products that were demanded by the market.

Tips for creating a product line extension strategy

Issues facing product line extensions can include company’s investments in the new products without the desired return. The product may come at a loss or may not be able to make enough of the return the company was forecasting for. The new addition could also send confusion to the company’s customer base, and in turn negatively affect the loyalty they have for the brand. 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.

With their popularity, the company continues to undergo product line extensions. Now Oral-B has Bluetooth, electric, battery, and kid’s toothbrushes. A line extension is when a current brand name is used to enter a new market segment in the existing product class, with new varieties or flavors or sizes. One option is to use phone extensions, especially if you want potential customers to call in. Suppose you are trying out 3 different ads on social media featuring various celebrities.

This makes product line extension less hazardous than introducing a whole new product or undertaking a brand extension. An advantage to downward product line extension is it creates more competition between brands. This can be good for the consumer as product prices may become more competitive, and goods may become cheaper to purchase. Increased competition generated from the extension allows the brand to gain more market share over their competitors. The brand can also benefit from an increase in exposure through this competitive process.

The Honda brand has benefitted from a reputation of being fun-to-drive and a brand association with racing. The soap has been marketed as a premium, feminine soap for a century, and has builtbrand associationsto France, movie-stars, and glamour. They have an innovation SKU they call a “Limited Batch Flavor.” As of writing this, the flavor is Pucker Upper Sorbet. They also encourage customers tovote on which flavor to bring back; this is akin to our guide to fold the innovation SKU into the main line if it is well-loved. Both it’s oil and fibers have excellent technical properties and can be made into many products.

Test new product line extensions in small quantities

The company can extend its product line down-market stretch, up-market stretch, or both ways. You are looking to add slightly different products to this brand. With a brand extension, you are venturing into other product categories. Brand extension refers to the expansion of the brand itself into new territories or markets. For instance, if a soft drink manufacturer unveils a line of juices or bottled water products under its company name, this would constitute an example of brand extension. The brand, or company, is an established name, and so the name alone can serve to drive customers to try new products completely unrelated to the older product lines.

• The brand has also launched regular coke in an array of packaging materials and sizes as well.
• But Crystal Pepsi did not start as a failure; the idea resonated with the market, and it successfully launched.
• With this product volume and price, a less-luxurious image can be formed around the brand by consumers.
• Brand extension is a popular marketing strategy that has been widely used since the second half of the 20th Century.
• Never mind the failures they might have had along the way, it’s just a matter of really understanding what shoppers want and finding new and exciting ways to provide it to them.

Once a company has a successful brand, expansion is going to be almost inevitable. It’s important to weigh the benefits of extensions and see if a product line or brand extension would be the most profitable. An example of a line extension is when a company makes a new product that is slightly different from an existing product. As an organization grows, extensions go from a luxury to a necessity.

Add line extension to one of your lists below, or create a new one. A line extension of lower quality is called “trading down” or “down-market stretch”. Or maybe the current pandemic has forced your teams to work remotely for the foreseeable future. Many offices are experimenting with hybrid workdays where some employees come in for part of the week only. Others may work mostly from home, coming in for training or meetings.

You can set incoming calls to ring all extensions within the team at once or cycle through each extension until someone answers the call (round-robin routing). Routing calls to phone extensions involves one of several algorithms which determine how calls are handled. Most organizations will have different rules based on whether the recipient is an individual, team, or department. If an employee leaves or the business no longer needs as many extensions, simply delete them and update the auto-attendant . Even if your provider does not charge extra for phone extensions, you might want to delete unused ones for easier manageability.

• Product line extensions are fairly low risk because you already have a successful brand.
• If an employee leaves or the business no longer needs as many extensions, simply delete them and update the auto-attendant .
• It resulted in some free promotion, it connected Coca-Cola with the holiday season, and I am sure it displaced some competitive products in store for the three months.
• BitcoinBitcoin is a digital currency that came into existence in January 2009, speculated to be created by Satoshi Nakamato, whose true identity is yet to be authenticated.
• Most of the food and beverage line extensions we discussed (Hellmann’s Olive Oil, Cristal Pepsi, and Burger King Satisfries) all were responses to the trend towards health and ingredient-conscious eating.

Colgate-Palmolive extended their line of toothpastes with one that has hemp seed oil. I consider two products to be in the same category if they meet the same need. You could swap one for the other for a customer, and they could accomplish what they were after. For example, when a soft drink company offers a new flavor of soda.

Both Lux soap and light https://1investing.in/ are tied to glamour and Bollywood, so a skin-whitening soap was a natural line extension for the Lux line of soaps. Lux White Impress can be purchased as both bar soap, and a body wash. Hello Products is a very fast-growing brand because of its alignment of values with its customers. Both the company and the customers are willing to experiment with personal care products with interesting and natural ingredients.

You don’t have to change anything, their current extension will still work even if the physical location changes. If you have department extensions, you can update an employee’s number if they switch divisions or get a promotion. Phone extensions have been around for a long time, the feature is almost as old as landline technology.