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Line Extension

Line extension involves using an established brand name on a new product. It provides short-term advantages like instant name recognition but long-term disadvantages like blurring the original brand image. Successful line extensions are tested using methods like the "shopping list test" and "bartender test" to ensure the new product fits with customers' perceptions of the brand. Positioning a company involves determining what the company name stands for in customers' minds and crafting corporate programs and diversification strategies accordingly. Positioning of products and services uses similar strategic approaches focused on how customers perceive the offering.

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Mohsin Ali
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823 views

Line Extension

Line extension involves using an established brand name on a new product. It provides short-term advantages like instant name recognition but long-term disadvantages like blurring the original brand image. Successful line extensions are tested using methods like the "shopping list test" and "bartender test" to ensure the new product fits with customers' perceptions of the brand. Positioning a company involves determining what the company name stands for in customers' minds and crafting corporate programs and diversification strategies accordingly. Positioning of products and services uses similar strategic approaches focused on how customers perceive the offering.

Uploaded by

Mohsin Ali
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Line Extension

Taking the name of an established product and using it on a new one

Advantages of Line Extension


Line extension provides short term advantages
Instant flash of understanding Instant flash in sales Quick profit growth

Example:
Diet Coca Cola Packard Clipper Alka-Seltzer Plus

Disadvantages of Line Extension


Disadvantages of Line Extension is always in long run
No independent position in mind Names are forgettable Contribute to blur the image of the parent brand Brand name becomes a substitute, may get segregated

Example:
Levis for feet Procter and Gamble Pierre Cardian

Tests for the Line Extensions


The shopping-list test
Classic test for line extension
E.g. Pampers, Nestle, Shezan

The bartender test


Difference in point of view of drinker and serving
E.g. Chivas Regal
Johnnie Walker

Cutty Sark Brand


Cutty 12

Concepts of Line Extensions


Act One:
Big Breakthrough

Act Two:
Fueled by Greed and Vision

Act Three:
Denouement

A Name is a Rubber Band

More you stretch a name The weaker it becomes

Rules of the Road


Expected Volume
Potential Winners (No) Small Volume (Yes)

Competition
Vaccum (No) Crowded Field (Yes)

Advertising Support
Big Budget (No) Small Budget (Yes)

Significance
Breakthrough Products (No) Commodity Product (Yes)

Distribution
Off-the-shelf (No) Sales Representatives (Yes)

Positioning a Company: Xerox


Position anything:
A person A Product A Politician A Company

Name Problem
Your company name ought to stand for something within your industry
Example:
Greyhound (More than a bus company)

Standing for Something


Corporate programs settle on routine and unimaginative approach based on people, resources, innovation etc. Example:
Ford Company stand for their people

Diversification is not the Problem


May be able to make more money Think twice for brand positioning through diversification Positioning and diversification are two poles apart
Example:
General Motors

Xeroxs Mind
Well known brand name for copiers Office marketing moving towards computer based information system (Xerox Data System) Office automation products, XTEN network, ethernet network, star workstation, 802 personal computers

Whats in Prospects Mind


Office automation system is not in cards Xerox does not make chart, when asked about the preference for office information system Prospects mind cannot be changed Copier is the strongest asset of Xerox
Brand Name IBM Wang Digital Equipment AT&T Hewlett-Packard Percentage Respondent 81% 40% 36% 22% 21%

Third-Leg Opportunity
Xerox is left with the only option of Output Leg AT&Ts telephone leg becomes communication leg IBMs typewriter leg has become the input Options:
Laser typewriters, Laser printers and Laser memory systems

The Fourth Technology


Thermography
Infrared rays, special papers

Xerography
Action of light, plan paper

Microprocessor Technology
Computer companies, IBM

Lasography
Laser beam and optical fibers

Lasography is an opportunity for Xerox to create a broader mental position

Positioning is a Game
One can not sit still
One has to be constantly alert

Keep your position targeted


For todays problem and todays market

Positioning a Product: Milk Dude


Looking into the mind
Organized system Based on communication Only take place at right time Under right circumstances

Repositioning the Competition


On the basis of:
Pack size Shape Price Promotion Placement

Example:
Pakistan State Oil, Pakistan Cricket Board

The Long-Lasting Alternatives


Solution to positioning problem
Usually found in prospects mind

Not in the product

Difference between Positioning Product and Service


Their exists no difference between the positioning of a product and service with respect to strategic point of view The major difference between the two is in techniques

POSITIONING A SERVICE

What is Positioning ?
Positioning is owning a piece of consumers mind Positioning is not what you do to a product
Its what you do to the mind of the prospect

You position the product in the prospects mind


Its incorrect to call it Product Positioning Ries & Trout

Examples
Colgate Is Protection LUX Is Glamour

Ponds DFT Is Confidence

AXE Is Sexual Attraction

Gillette Is Quality

Positioning

What is service?
Intangible Satisfy need of the customer An Act Performance one party offer another part

Types
Retail Financial Insurance Telecom IT/Software Advertising Consultancy Logistics Banking

Entertainment Travel Hospitality Healthcare Internet Media And many more

Tangibility Spectrum
Salt
Soft drinks Detergents Automobiles Cosmetics Fast-food outlets

Intangible dominant Tangible dominant


Fast-food outlets Advertising agencies

Airlines Investment management Consulting Teaching

Positioning a services
We are in the business of exceeding peoples very high expectations Eisner - CEO Walt Disney Service business are more difficult to manage
Product waits on the shelf whereas customer interacts with service provider whose service quality is variable.

TELEGRAM
TELEX in Germany 1933 Siemens machine'sTelex 1960

tellexPuma_teleprinter 1980`s

Positioning a Service:Mailgram
A mailgram is a type of telegraphic message which is transmitted electronically from the sender to a post office and then printed and delivered to the recipient via postal means.

WESTREN UNION
Preference Of WU Quality Delivery Flexibility Security Shorter red tape

Positioning a services visual VS verbal


Product
Picture and visual element

Service
Words and verbal element

Television and visual orientation

Radio and verbal orientation

Positioning a Service
High speed Quality services Proactive approach Reliability --- delivering on promises Responsiveness--- willing to help Assurance --- improving trust and confidence

Low Cost vs High Speed


Example: Daewoo vs New khan,Niaz

Service preference of Daewoo


Seat pitch/comfort Seat width Reclining capacity Meal and bevrages Staffing ratio Departure & arrival lounge Insured passanger Healthy envoirment Non stop

Positioning Offerings
Positioning Strategies

1. By attribute or benefit 2. By price and quality 3. By use or application

4. By user
5. By product or service class 6. Against competition
5-37

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