Communication Matters: Line Extensions
David Glenn
Founder @ Connected Research and Communication Consulting | Behavioral Economics
An earlier article explained that that the new product failure rate is about 90%; this can be reduced greatly by using a line extension strategy. Line extensions happen ?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 a brand extension which is a new product in a totally different product category. The next article will cover brand extensions.
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One of the best users of line extensions is Mars, where I worked as a marketing research director. Successful examples are M&Ms, Snickers and Skittles. For example, we introduced red M&Ms to other existing colors. At the time, senior management was concerned that the red coating might turn off current buyers due to negative publicity over red dyes. This did not happen! Instead! The extension move resulted in net increase in revenues by leveraging existing brand equity in the minds of consumers. A future article will address brand equity.
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Why are line extensions so powerful? It all has to do with understanding brand equity. Extending a product line under an existing brand can attract buyers who (1) have different preferences and, (2) are already familiar with the brand.
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What are some failed line extensions?
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·??????? Ben-Gay aspirin
·??????? Smucker’s ketchup
·??????? McDonald’s McPizza).
·??????? KFC edible nail polish
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A major danger signal occurs when a company launches too many line extensions. This can cannibalize the parent brand. A research technique called a TURF analysis, which stands for Total Unduplicated Reach and Frequency Analysis, is the potential impact of a combination of products, features, or marketing actions on consumers' purchase decisions.
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We have managed many communication engagements to help clients – both research and consulting --. That is what we do. Please write or call to learn more about TURF or brand equity.
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Email: [email protected]
Cell: 203 253 2403
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