A product line extension is the use of an established product’s 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 flavors, forms, colors, added ingredients, package sizes. This is as opposed to brand extension

Brand extension

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off. Organizations use this strategy to increase and leverage brand equity...

 which is a new product in a totally different product category.Line extension occurs when the company lengthens its product line beyond its current range. The company can extend its product line down-market stretch, up-market stretch, or both ways.

Down-Market Stretch
A company positioned in the middle market may want to introduce a lower-priced line for any of the three reasons:



1. The company may notice strong growth opportunities as mass retailers such as Wal-Mart, Best Buy, and others attract a growing number of shoppers who want value-priced goods.


2. The company may wish to tie up lower-end competitors who might otherwise try to move up-market. If the company has been attacked by a low-end competitor, it often decides to counterattack by entering the low end of the market.


3. The company may find that the middle market is stagnating or declining.

Up-Market Stretch


Companies may wish to enter the high end of the market for more growth, higher margins, or simply to position themselves as full-line manufacturers. Many markets have spawned surprising upscale segments: Starbucks in coffee, Haagen-Dazs in ice cream and Evian in bottled water. Leading Japanese auto companies have each introduced an upscale automobile: Toyota's Lexus, Nissan's Infiniti, and Honda's Acura. Note that they invented entirely new names rather than using or including their own names.

Two-Way Stretch


Companies serving the middle market might decide to stretch their line in both directions. Texas Instruments (TI) introduced its first calculators in the medium-price-medium-quality end of the market. Gradually, it added calculators at the lower end taking the share from Bowmar, and at the higher end to compete with Hewlett-Packard. This two-way stretch won Texas Instruments (TI) an early market leadership in the hand-calculator market.

Examples include

• Zen LXI, Zen VXI
• Surf, Surf Excel, Surf Excel Blue
• Splendour, Splendour Plus
• Coca-Cola
  Coca-Cola
  Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
  
  , Diet Coke
  Diet Coke
  Diet Coke is a sugar-free soft drink produced and distributed by The Coca-Cola Company. It was first introduced in the United States on August 9, 1982, as the first new brand since 1886 to use the Coca-Cola trademark...
  
  , Vanilla Coke
  Vanilla Coke
  Coca-Cola Vanilla is the limited relaunch of the formerly produced Vanilla Coke soft drink from the early 2000s. Vanilla Coke is a vanilla flavored version of Coca-Cola Classic....
  
  
• Clinic All Clear, Clinic Plus
• Reese's Peanut Butter Cups, Reese's Pieces and Reese's Puff Cereal

See also

• brand
  Brand
  The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
  
  
• brand management
  Brand management
  Brand management is the application of marketing techniques to a specific product, product line, or brand.The discipline of brand management was started at Procter & Gamble as a result of a famous memo by Neil H...
  
  
• marketing
  Marketing
  Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
  
  
• product management
  Product management
  Product management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product or products at all stages of the product lifecycle....
  
  
• Product lining
  Product lining
  Product lining is the marketing strategy of offering for sale several related products. Unlike product bundling, where several products are combined into one, lining involves offering several related products individually. A line can comprise related products of various sizes, types, colors,...