As a consumer you benefited from the extension of a product

As a consumer, you benefited from the extension of a product line. Now put yourself in the shoes of the manufacturer who is battling performance targets from Wall Street on a quarterly basis as well as competition from competing brands. Do you risk cannibalization of your brand by simply reacting to the moves of competitors? At what point of the product life cycle do you extend the product?

Respond to the following:

• Consider the statements “Brand extensions can endanger brands” and “Brand extensions are an important brand growth strategy.” Take a stand and justify one statement, supporting it with examples

Solution

As that product life cycle nears an end, the company must decide what to do: retire the product altogether or extend the life cycle of the product through a number of strategies. Among these strategies are new approaches to packaging and featuring the product, different pricing strategies for the product, re-branding techniques for the product, and expanding the market for the product to an audience abroad. Iwould extend the product at the stage of saturation. This can be done through following steps.

A brand extension is when a company uses its leverage to launch a new product in a different category.

Snickers Ice Cream Bars are a brand extension of the Snickers Candy Bars.

Brand extension strategies

Similar product in a different form from the original parent product - This is the strategy Snickers used to create Snickers Ice Cream Bars.

Expertise - Honda is known for reliable engines, which made Honda lawn mowers a good move for the company.

Vertical extensions - This strategy has the reputation of going backwards. For example, Rice Krispies are used to make Rice Krispies Treats. So Kellogg decided to offer a ready-to-eat version of this snack.

Designer image/status - Harley-Davidson found success with this strategy through its clothing line.

Brand extensions are an important brand growth strategy, According to Kotler and Keller (2012), “Two main advantages of brand extensions are that they facilitate new-product acceptance and provide positive feedback to the parent brand and company”.

But this extension has t make sense otherwise that can endanger brands. If a company does not have leverage in the category it wants to go into, it will likely fail.