14 Examples of Product Extension

John Spacey, June 18, 2019

Product extension is the use of an established brand name for a new product in the same product category as an existing product line. This has several common variations:

Packaging

Changes in package size or format. For example, coffee that is sold in bags that is extended to the same product in a resealable can.

Flavors

Additional flavors such as a line of organic fruit-only jams that adds a cherry jam to their product line.

Forms

Changes to product form such as a hardcover book that is released as a paperback.

Features

Adding or subtracting features. For example, a smart thermostat that releases a product that is fully offline for customers who are concerned about privacy.

Function

Adding or subtracting functions such as a gaming mouse that is released as a standard two button mouse for regular users.

Performance

Increasing or decreasing performance. For example, a manufacturer of high performance wifi routers that releases a low-end model for the consumer market.

Styles

Different styles and colors of the same product can be considered a product extension.

Formulations

Product variations that have different ingredients such as an organic and non-organic version of a juice product.

Horizontal Extension

A horizontal extension is the release of a new product that has the same quality and price as existing products. This provides more variety to attempt to gain market share with stronger product differentiation.

Vertical Extension

Vertical extension is the release of new products at different levels of quality and price from your current offerings. For example, a resort that offers cheaper or more luxurious rooms.

Price Discrimination

Price discrimination is the process of trying to offer price sensitive customers a lower price and price insensitive customers increased quality or convenience. For example, a manufacturer of men's belts that offers popular colors at a high price and unpopular colors at a low price such that customers who are willing to sacrifice color for price can save money.

Down-market Stretch

The release of new products designed to be more affordable, usually at reduced quality. For example, a luxury chocolatier that releases a line of packaged products with a relatively long shelf life for sales at grocery stores. This risks damaging brand image as luxury chocolate consumers will wonder why they are paying so much for a brand available at a grocery store.

Up-market Stretch

The release of premium versions of a product designed to appeal to customers who are willing to pay more. For example, a sunscreen brand that releases a product that is made with organic ingredients that are all perceived as healthy that have less impact on the environment at a much higher price than products in the line that use standard chemical ingredients commonly found in sunscreens.

Brand Extension

Brand extension is the use of a brand name on a completely different type of product. For example, a car manufacturer that releases a line of bicycles. This risks confusing your brand identity in the minds of customers.

Notes

The difference between product extension and brand extension is that a product extension is in the same product category as existing products whereas a brand extension is a completely different type of product.

Overview: Product Extension
Type	Product Strategy
Definition	The use of an established brand name for a new product in the same product category as an existing product line.
Also Known As	Product Line Extension
Related Concepts	Product Strategy » Product Features » Product Variety » Product Differentiation » Quality » Price Discrimination »