Question

What is a product line extension? How does it differ from a product mix? Name the three types of modifications listed in the text that can be used in creating a product line extension.

Answer 1

Solution:

A product line extension is a process of creating a new product by modifying the features and attributes of already existing products of a particular product brand in the product mix of the company. When an already existing product is added with a new feature or attribute and is then marketed separately from the original product, then this is said to be an example of a product line extension. Hence, this is nothing but introducing a new product under an already existing product brand name or product category.

The product mix is nothing but the total number of the product line that is offered by the company to the customers. A product line extension is a subset of product mix. If the product line extension products are introduced the similar changes are also been made to the product mix of the company.

Three types of modifications which can be used to create product line extension are as follows,

• Adding flavors
  Adding more flavors to the products like ice cream, alcohol or drinks is very often used to introduce new products under the same brand name with existing products in the market.
• Adding more SKU
  Adding more packagings with different volumes to the products which are already in the market is often used for a product line extension. The examples are oil cans, biscuit packs, etc.
• Adding extra features
  Adding more features to a product and introducing a new product under the same brand name also leads to the product line extension. Examples are laptops, mobile, etc.

These are the three changes which are most widely used in the product line extension by the brands.