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Benefits and Risks of Line Extension

Benefits of Line Extension

 

  • Gain more potential customers

  • Reinvigorate brand or product line

  • Increase consumer awareness of brand

  • Tap into new markets

  • Increase diversity of inventory

  • Release new products

  • Increase market share in a given sector

  • Enable companies to promote new products with reduced promotional costs because brand is already known and established

  • Offer customers more variety

  • Expand shelf space presence

  • Greater production efficiency

  • Greater marketing efficiency

  • Increased profits

     

     

     

     

     

     

     

     

     

Risks Associated with Line Extension

 

  • Potential for failure which may damage existing brand

  • Possibility of creating competition within brand. Having current customers switch from already established product

  • If it fails, customers might feel less likely to try released under same brand in the future

  • Possibility that if you have too many different products, your more successful products will lose their perception of being specialized by your brand and you may lose existing clients

     

     

     

     

     

     

     

     

     

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