Which strategy should I take

Date of publication: June 15, 1990

Company: Burke, Inc.

Author: Lynn Y.S. Lin

Abstract:

During the 1980’s we saw a new phenomenon in the marketplace in Europe and the U.S.: line extensions outnumbered new product launches. This certainly coincides with our experience in Europe using BASES system. For the last ten -10 years, 39% of our 2600 BASES tests in Europe have been line extensions, with about 50% during the last two years. Remember that a great number of line extensions are launched without any pre-test market research due to their lower risks. Oftentimes, marketers ask us the key strategic question: "With this new product I have, should I launch it as a new brand or a line extension?" This paper intends to share with European colleagues our experience from the U.S. and Europe how we assist marketers in answering this question. This paper will address these issues and, in the meantime, show case examples from different product categories (food & drinks, household products, personal care and pet products) concerning the differences in consumer responses and behavioral measurements between a line extension or as a new brand on the following: -Purchase Intention -Penetration & Repeat Rates -Purchase Cycle -Uniqueness -Like/Dislike -Price Value. In-market validation summary of more than 100 European line extensions will be summarized together with critical issues of cannibalisation.

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