| Popis: |
Introducing new products is both risky and critical to a company’s success. To help mitigate these risks, the use of line extension strategies has become widespread, with some researchers reporting that 95% of new product introductions are extensions of current brands. Support for the use of line extensions is based on the extended product’s ability to leverage favorable parent brand associations and, hence, demonstrate a greater degree of success. To fully understand the success of a line extension, its impact, or spillover, on the parent brand must also be taken into account. This prompts the research question: Will a line extension help or hurt the parent brand? That is, will the introduction of the line extension result in incremental or reduced unit sales of the parent brand. To address this critical issue, we integrated both scanner data and survey data for 45 parent brand/line extension pairs across 15 Consumer Packaged Goods categories. We find that marketing activity on the line extension can exhibit either a net positive or a net negative impact on the parent brand depending on the degree of fit between the two products. The key finding is this: If similarity and concept consistency between the brands are both high – or both low – the extended product introduction will have a neutral to favorable impact on sales of the parent brand. |
