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Article
Publication date: 1 June 1999

Edwin J. Nijssen

Among the range of strategies available to a company, line extensions are an important way to keep a brand alive and to realize incremental financial growth. In order to…

Abstract

Among the range of strategies available to a company, line extensions are an important way to keep a brand alive and to realize incremental financial growth. In order to be successful at introducing new extensions managers should understand line extensions’ key success factors. In this study three market‐related factors’ impact on line extension success were investigated, i.e. the level of competition in the market place; retailer power; and consumers’ variety seeking behavior. Data collected from 49 marketing and product managers in the fast‐moving consumer goods industry showed that line extensions have very little added value over existing products, and that cannibalization is very much related to a line extension’s success. Of all line extensions, those involving new flavors and new packaging/sizes were most successful. Extensions that improved product quality were found to be unsuccessful. The market‐variables: level of competition; retailer power; and variety seeking behavior all had a negative influence on line extension success. Dominant brands were hurt more by variety seeking behavior’s negative impact than less dominant brands.

Details

European Journal of Marketing, vol. 33 no. 5/6
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 April 2006

Shantini Munthree, Geoff Bick and Russell Abratt

The objective of the paper is to provide an understanding of how large organisations develop line extensions of their brands and to present guidelines for management when…

Abstract

Purpose

The objective of the paper is to provide an understanding of how large organisations develop line extensions of their brands and to present guidelines for management when considering an upscale line extension.

Design/methodology/approach

A qualitative research technique was used in this study. It involved case study research in the beverage industry, where 11 senior marketers were interviewed in depth.

Findings

A line extension into premium categories was seen to be an effective strategy to revitalise a brand. Respondents also stated that the line extension needs to be very closely linked to the core brand. Being an early entrant but not first‐to‐market or late‐to‐market was also important.

Originality/value

Guidelines to management are provided and a framework is developed for using upscale line extensions in brand revitalization strategies. Marketing managers have been given a three‐step approach to line extension management.

Details

Journal of Product & Brand Management, vol. 15 no. 3
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 2 March 2010

Ian Clark Sinapuelas and Sanjay Ram Sisodiya

The purpose of this empirical paper is to determine the effects of line extension introductions on parent brand equity.

Abstract

Purpose

The purpose of this empirical paper is to determine the effects of line extension introductions on parent brand equity.

Design/methodology/approach

The paper uses a cross‐sectional sample of 318 supermarket brands. A system of equations is proposed and estimated using seemingly unrelated regression.

Findings

Brands benefit from line extension introductions, but only high equity brands benefit from innovation. Low equity brands benefit from the solo advertising of their new line extensions.

Practical implications

The results suggest that there are two routes for improving brand equity; high equity brands can introduce innovative products, while low equity parent brands may improve brand equity by supporting new line extensions with solo advertising.

Originality/value

The paper is important in identifying the effects of new product introduction and innovation on brand equity.

Details

Journal of Product & Brand Management, vol. 19 no. 1
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 1 December 1998

Richard Speed

When managers launch a new product line into a category already served, they must decide whether to launch this as a line extension or as a second brand. This research…

Abstract

When managers launch a new product line into a category already served, they must decide whether to launch this as a line extension or as a second brand. This research seeks to identify how this decision is influenced by the position of the original product and the options available for positioning the new product. A model of the influences on brand and line extension success is developed and used to formulate a series of competing hypotheses about the factors that influence the decisions of managers. These hypotheses are tested using survey data from producers in the Australian wine industry. The results suggest managers seek to exploit the benefits available from the transfer of attributes to the new line, and minimise the risk of cannibalisation.

Details

Journal of Product & Brand Management, vol. 7 no. 6
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 5 September 2018

Jean Boisvert and Nicholas J. Ashill

The purpose of this paper is to empirically assess the impact of branding strategies on horizontal and downward line extensions of French luxury brands in a cross-national…

Abstract

Purpose

The purpose of this paper is to empirically assess the impact of branding strategies on horizontal and downward line extensions of French luxury brands in a cross-national context (France vs USA).

Design/methodology/approach

This study is based on a two line extensions (horizontal/downward) × three branding strategies (direct brand/sub-brand/standalone brand) x two country (France/USA) between-subjects ANOVA design.

Findings

The study shows that the subtyping effect created by a sub-branded luxury downward line extension tends to be rated similarly to a direct branded extension which oppose previous beliefs put forward in non-luxury settings. In contrast, a new independent/standalone extension fully uses the subtyping effect which helps attenuate this risk related to luxury downward stretches. The study also found that the effect of gender in cross-national settings must always be taken into consideration as significant variations occur in the process.

Research limitations/implications

The study covers two countries but should be replicated in other cross-national contexts.

Practical implications

This study helps marketing managers of luxury brands make a better decision when it comes to launching vertical line extensions (upscale/downward) by carefully using types of branding strategies and relevant communications whether women and/or men are targeted in cross-national contexts.

Originality/value

This study breaks new ground in the international luxury literature by providing key theoretical and managerial insights in terms of launching new downward line extensions with the proper use of branding strategies when targeting specific genders.

Details

International Marketing Review, vol. 35 no. 6
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 18 August 2014

Feng Shen

The purpose of this study is to examine how perceived fit between a line/brand extension and its parent brand moderates the evaluation of two economically identical…

Abstract

Purpose

The purpose of this study is to examine how perceived fit between a line/brand extension and its parent brand moderates the evaluation of two economically identical promotions, i.e. buy one get one free (BOGOF) and 50 per cent off. A travel-sized painkiller is the product in this study.

Design/methodology/approach

A 2 (perceived fit: high or low) × 2 (promotion type: BOGOF or 50 per cent off) between-subjects design is used in this study. Participants, who are college students, are randomly assigned to the four experimental conditions.

Findings

The results indicate that parent brand attitude is more closely associated with line-extension attitude than with brand-extension attitude, line extension leads to lower perceived performance risk and higher stockpiling tendency than brand extension and BOGOF is preferred over 50 per cent off for line extension but 50 per cent off is preferred over BOGOF for brand extension.

Research limitations/implications

For a low-price, non-conspicuous and stock-up product category such as painkillers, marketers should consider using BOGOF to promote a line extension and 50 per cent off to promote a brand extension. It is important to explore in future research as to how the findings can be applied to other product categories, other promotion types, other packages and non-student consumers.

Originality/value

This study is the first that examines how perceived fit of a line/brand extension moderates the evaluation of economically identical promotions. It integrates the literature of line/brand extension, perceived performance risk and prospect theory to advance the research on sales promotions for new products.

Details

Journal of Product & Brand Management, vol. 23 no. 4/5
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 14 March 2016

Jean Boisvert

The purpose of this paper is to investigate the extent to which the accessibility of established parent brand information and the diagnosticity of newly launched…

Abstract

Purpose

The purpose of this paper is to investigate the extent to which the accessibility of established parent brand information and the diagnosticity of newly launched horizontal and upward service line extensions affect transfer and reciprocal transfer of brand associations.

Design/methodology/approach

A field study using a survey methodology based on a 2×2 experimental random design was conducted with a sample representative of the target population of an established bank in Eastern Canada. Two levels of parent brand accessibility (high/low) and two levels of line extension (upward/horizontal) were tested. Pretests were conducted, and the analysis of results was done using a three-point-in-time confirmatory factorial analysis for each cell.

Findings

The findings indicate that for a newly launched horizontal service line extension, when accessibility of an established parent brand is high, information transfer and reciprocal transfer of brand associations is strong and complete. When accessibility is low, transfer is strong but incomplete, leading to partial dilution of the parent brand. In the case of a newly launched upward service line extension, for both high- and low-accessibility contexts, only key diagnostic parent brand associations transfer to the extension. Reciprocal transfer is strong, leading to a significant dilution of the parent brand.

Research limitations/implications

Other kinds of extensions (e.g. downward, distant), other types of services, and consumer goods could be tested to observe the extent to which transfer works.

Practical implications

This study provides key findings to managers who are responsible for launching newly created service line extensions (horizontal and upward). When evaluating a new vertical service line extension, consumers actively process the available information at hand (e.g. print advertising, point-of-purchase materials), but key diagnostic associations of the parent brand tend to persist over time. Thus, marketers must be careful when using or not using parent brand information during launch, though an upward service line extension is likely to dilute the parent brand’s equity, either positively or negatively.

Originality/value

This paper brings new insights to the service branding literature with respect to the dynamics of transfer of brand associations between service line extensions (horizontal and upward) and their parent brands. Drawing on the accessibility-diagnosticity framework, it closes an important theoretical knowledge gap regarding the persistence over time of accessible vs diagnostic parent brand information in the mechanisms of transfer of brand associations to and from different types of service extensions.

Details

Journal of Service Theory and Practice, vol. 26 no. 2
Type: Research Article
ISSN: 2055-6225

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Article
Publication date: 5 February 2018

Nicolas Gonçalves Pontes

Literature in brand extensions has relied greatly on categorization theory and on prototypical models of categorization to explain the affect transfer from a parent brand…

Abstract

Purpose

Literature in brand extensions has relied greatly on categorization theory and on prototypical models of categorization to explain the affect transfer from a parent brand to its extensions. Drawing on the range theory exemplar models of categorization, this paper aims to show the effects of parent brand endpoint prices on consumer judgments of vertical line extensions.

Design/methodology/approach

Three experiments have been conducted. Experiment 1 tests the hypothesis that consumers rely on the parent brand price range when making judgments of an upscale extension. Experiment 2 tests the hypothesis that the effect of price range on extension evaluation is mediated by perceived risks for upscale extensions but not downscale extensions. The final experiment shows a boundary condition to the product line range effect on upscale extensions.

Findings

This research shows that upscale extensions are judged more favorably in the context of a wide versus a narrow product line even when the highest endpoints in both product lines are equally close to the extension and that this effect is mediated by perceived consistency and perceived risk. The range effect disappears, however, when consumers have a broad focus in which attention shifts to category endpoint prices, making parent brand prices less diagnostic of upscale extension judgments.

Practical implications

Managers may display a wider range of products and/or reduce prices of low-end models to expand product line price width. In consequence, low-end products become more competitive in terms of price and at the same time improve favorability ratings of the new upscale product.

Originality/value

Vertical line extensions and product line pricing are important topics to both academics and practitioners. Nonetheless, this is the first research to demonstrate how product line price width can influence consumer perceptions of vertical line extensions.

Details

European Journal of Marketing, vol. 52 no. 3/4
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 April 2021

Jean Boisvert and Nicholas Jeremy Ashill

The purpose of this study is to assess the extent to which gender impacts the evaluation of vertical line extensions of luxury brands in a cross-national context. The…

Abstract

Purpose

The purpose of this study is to assess the extent to which gender impacts the evaluation of vertical line extensions of luxury brands in a cross-national context. The topic of brand/line extensions has been investigated in the mainstream branding literature. On the other hand, the topic has received less attention in the luxury literature. At the same time, while research has examined brand/line extensions from an international perspective, the impact of gender on consumer purchase intentions of luxury downward line extensions in different countries has remained unexplored.

Design/methodology/approach

Based on an ANOVA design (2 extension types × 2 genders × 2 countries). The independent variables were ordered as follows: gender (male/female), vertical line extensions (upscale/downward) and country of living (France/USA). The purchase intention of the extension was chosen as the dependent variable.

Findings

The study results show that key differences exist between men and women regarding vertical luxury line extensions. For instance, women in both countries rate a new downward line extension of a luxury brand more positively than men. In contrast, although women evaluate a new upscale line extension of a luxury brand similarly to men in France, women are more positive than men in the USA. Also, US men rate an upscale extension less positively than their French counterparts. Finally, women in both countries rate luxury downward extensions more positively than men.

Originality/value

This study contributes to the literature of luxury brand management by examining how gender types process and respond to upscale and downward luxury line extensions versus purchase intentions in two different countries. This paper is unique as gender types are not often compared in previous research while fundamental distinctions exist, leading to significant differences. Practically, this study also provides key insights for marketing strategy development and adjustment for luxury manufacturers in terms of their target market, more specifically men versus women.

Details

Journal of Product & Brand Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 8 December 2020

Jihoon Cho and Swinder Janda

Firms often use upward product line extensions to achieve gains in brand evaluations and in overall demand. Despite the prevalence of such extensions, previous research…

Abstract

Purpose

Firms often use upward product line extensions to achieve gains in brand evaluations and in overall demand. Despite the prevalence of such extensions, previous research has provided little guidance about how upward line extensions influence overall revenue when they are launched as a core product as opposed to a peripheral product. The purpose of this study is to fill this research gap.

Design/methodology/approach

Using data from the quick service restaurant industry, this study looks at the effects of upwardly extended core and peripheral products on product line revenue. The empirical study uses a quasi-experiment to compare customer purchases across the pre- and post-launch of upward line extensions.

Findings

The results of this study reveal that launching core and peripheral products as upward line extensions can each increase total product line revenue. In addition, findings illustrate that as compared to a core launch, this total product line revenue increase is substantially higher in the case of a peripheral launch.

Research limitations/implications

First, the estimated model does not include supply availability and competition. Second, the data span only six months and this restriction prohibits us from investigating alternative sources of the causal effect. Third, the empirical setting in this study is limited to financial data in the quick service restaurant industry as a proxy of actual behavior. Finally, given that customers are not randomly assigned to treatment and control groups, the author is unable to definitively rule out the effect of unobservable attributes.

Practical implications

The findings suggest that firms should prioritize peripheral upward line extensions but use both types considering resource constraints (cost and human resources) and strategic importance to the firm.

Originality/value

This study bolsters the extant literature related to upward product line extensions by providing an empirical framework that evaluates the causal effect of upward line extension on total revenue, using field data in a real-life setting (as opposed to survey or lab experiment data) and actual firm revenue (as opposed to a perceptual outcome measure such as behavioral intentions). In addition, findings contribute to the new product development literature.

Details

European Journal of Marketing, vol. 55 no. 4
Type: Research Article
ISSN: 0309-0566

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