Are you familiar with line and brand extension? If not, then are you familiar with new product launching? A newly-product can either be classified as line extension or brand extension, depending on the context. 

Product Line Extension

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Product line extension is about expanding an existing product-line. An example of this case would be when a confectionery brand launched a new flavour to its candy line. To be exact, the confectionery did not offer an apple flavour in their candies, but they extended their product’s flavour. 

Product line extension can be beneficial for brands since it enhances the credibility of the brand. Judging from a customer’s point of view, a brand with more product options would be seen as an ‘expert’. Meanwhile, product line expansion saves production-cost since the manufacturer would be using the existing system and technology. The additional resource to create the new product line would not be that expensive. 

However, expanding a product line can impose some risks to the brands. For example, the customer and retailer can be confused when they are faced with an over-extended product line. In addition, it could also encourage competitors to copy the product line. 

Brand Extension

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Similar to product line extension, this business strategy also allows companies to earn higher profits. However, brand extension refers to expanding an existing brand to a new market. For example, a luxury car brand extends itself to a perfumery brand. This is where brand extension gets very tricky because the existing offerings can contradict the new extension. The luxury car brand extended to a perfumery market, hoping that the ‘luxury’ association would be attached to the fragrance products. This perception is not wrong, but some customers might think that the fragrance would not smell so nice. This is because cars have strong associations with gasoline.

Despite its drawbacks, brand extension can be cost-efficient, especially when the brand mantras are already well-known. This means that they can efficiently allocate the marketing budget to penetrate directly into their target market. They do not have to spend a huge amount of money to leverage the brand mantras. This is why business owners and marketers should conduct a thorough research before deploying brand extension.