Line extensions strategies involve adding goods related to the ini tial product, whose purchase or use is keyed to the product.For example, a computer company may provide an extensive selection of software to be used with its primary hardware. This strategy not only increases sales volume, it also strengthens the manufac turer's name association with the owner of the basic equipment, and offers dealers a broader line. These added items tend to be similar to existi ng brands with no innovations. They also have certain risks. Often the company may not have a high level of expeltise either producing or marketing these related products. Excessive costs, inferior prod ucts, and the loss of goodwill with distributors and customers are all possible deleterious outcomes. There is also a strong possibility that such a product decision could create conflict within the channel of distribution. In the computer example just described, this company may have entered the software business over the strong objection of their long-telm supplier of software. If their venture into the software business fails, re-establishing a positive relationship with this supplier could be quite difficult.
A line extension strategy should only be considered when the producer is certain that the capability exists to efficiently manufacture a product that compares well with the base product. The producer should also be sure of profitable competition in this new market.
Line-filling strategies occur when a void in the existing product line has not been filled or a new void has developed due to the activities of competitors or the request of consumers. Before considering such a strategy several key questions should be answered:
? Can the new product support itself?
? Will it cannibalize existing products?
? Will existing outlets be willing to stock it?
? Will competitors fill the gap if we don't?
? What will happen if we don't act?
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