How to launch a successful line extension

While many marketers tend to focus on trade partner programmes or consumer campaigns to squeeze the most out of their brand, new research reveals separating one from the other can be fatal.

According to Nielsen's Bases service, which specialises in npd, the key to sustained long-term profitability is to optimise activity with both trade partners and consumers.

Focusing on both sides of the coin will yield the growth you seek without harming your brand's hard-earned equity, it says.

Nielsen has identified four factors that it claims are critical to driving brand growth:

• Attracting new or lapsed buyers

• Increasing loyalty (or consumption) among existing customers

• Doing the same with retailer

By gaining a deeper understanding of these key factors, it is possible to develop strategies to maximise overall brand value, it says.

Nielsen stresses, however, a dual approach is required to take into account relationships with both trade partners and consumers. It is impossible to affect one without affecting the other, it says.

Nielsen reminds brand owners retailers do not measure success in the same way marketers do. While marketers concentrate on driving profits of each particular brand, retailers are interested in profits per square metre of store space.

In order to make line extensions work, brand owners must always ensure they make sense to the consumer.

There's no point launching a product or service if potential buyers are unable to make a visual or emotional link with the core product, it says.

Line extensions that are close to the parent brand may appeal to consumers, but getting too close can lead to cannibalisation of the brand.

By the same token, being too far away form the parent brand may dilute its equity by being too much of a stretch.

Brand owners must also manage the line extension to ensure the process does not damage the core.

Download a copy of the Bases report and read the full review in Consumer Insights