The day I realized that line extensions kill my position!

12 06 2009

I have just completed an MBA and the funny thing is that throughout the course I was made to believe that Line Extensions were actually a good thing in the marketing world – they made use of the built up brand equity of the parent brand, they were efficient (required less ad spend) and overall, just seemed to work fine. Well, fine until I was recommended a book called “positioning” by a colleague of mine. For those of you who haven’t had a chance to read this book, I strongly recommend it. It’s a classic! 

 

An example of a failed line extension

An example of a failed line extension

 

Success achieved after creating a new brand

Success achieved after creating a new brand

Positioning teaches us that line extensions typically lead to significant short-term gains that eventually wither away. Seldom do line extensions occupy the top position in a market without toppling/cannibalizing a brand’s previous position. A great example of the failure of line extensions is the “Alkaline” version of Eveready, which failed in the marketplace until the company finally realized the problem and created a new brand called “Energizer”. Basically, this book has opened my mind and I think it might do the same for you.

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