LG’s Line-Extension
I was surprised to see a commercial on TV that said something like ‘LG also does Fabricare, Diapers, Soaps’ or something on those lines. I just can’t imagine or digest the idea of an LG soap. What do you think?
I read this on the net:
When Line Extensions Can Work
Despite the disadvantages of line extensions, there are some cases in which it is not economically feasible to create a new brand and in which a line extension might work. Some of the cases provided by Ries and Trout include:
- Low volume product – if the sales volume is not expected to be high.
- Crowded market – if there is no unique position that the product can occupy.
- Small ad budget – without strong advertising support, it might make sense to use the house name.
- Commodity product – an undifferentiated commodity product has less need of its own name than does a breakthrough product.
- Distribution by sales reps – products distributed through reps may not need a separate brand name. Those sold on store shelves benefit more from their own name.
(Source: Quickmba.com)
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