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40-401: A Lego theme is a product line of Lego construction toys produced by The Lego Group based on a central concept. Before 1978, Lego produced several construction sets with common themes, but they were not necessarily branded as part of a single series or theme. Following the introduction of minifigures in 1978, owner Kjeld Kirk Kristiansen pushed a new strategy of creating and marketing

80-432: A brands upward product line extension. A way to combat this is to increase the quality of the brands luxury goods, as well as targeting aspects of the consumer market that are able and prepared to pay more for the higher quality product. Companies serving the middle market might decide to stretch their line in both directions. Texas Instruments (TI) introduced its first calculators in the medium-price-medium-quality end of

120-472: A breach. When extending the product line downward, the new product or products become more available to consumers and most likely, cheaper. With this product volume and price, a less-luxurious image can be formed around the brand by consumers. This can either be a positive or negative impact on the brand depending on which industry and market the brand is a part of. For example, Walmart is widely known for its low prices and availability, so this consumer image of

160-483: A company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes. This is as opposed to brand extension which is a new product in a totally different product category. Line extension occurs when the company lengthens its product line beyond its current range. The company can extend its product line down-market stretch, up-market stretch, or both ways. Product line extensions are

200-418: A company may be selling health related items such as multi-vitamins tablet and magazines. Although both products fit into the same product line, they are completely dissimilar in use while one is editable and the other is not. When companies add a new item to a product line, it is referred to as the product line extension . The purpose of it is to attract new customers who may not be familiar or satisfied with

240-452: A line that define the image of the whole line. Image anchors are usually from the higher end of the line's range. When you add a new product within the current range of an incomplete line, this is referred to as line filling . Price lining is the use of a limited number of prices for all your product offerings. This is a tradition started in the old five and dime stores in which everything cost either 5 or 10 cents. Its underlying rationale

280-553: A longer range of products. The depth of product mix pertains to the total number of variations of product in a product line. For example, a brand would be considered to have a depth of four if it sells two sizes and two flavours of soda. The consistency of product mix refers to how closely associated the products in the same product line are to each other, in terms of their use, production and distribution. A business’ production mix could be very consistent in distribution, yet extremely different in other areas such as use. For instance,

320-419: A process where companies with an established brand alter the factors of a product or products to satisfy a refined segment in the market. There are two types of product line extensions, horizontal and vertical. Horizontal extensions consist of keeping the price and quality consistent, but changing factors like flavour or colour to differentiate the products. Vertical extensions consist of increasing and decreasing

360-415: A product extension strategy they can often benefit from the new addition or additions. This is as extending their product line enlarges their product portfolio and as a result provides the consumers with more variety to choose from. This is positive, as consumers tend to enjoy being able to have choice and through expanding a brands product line, the brand is providing this choice. Investing in this approach

400-408: A series of sets he termed a "system within the system" and the three original environments (based on the present, past and future, respectively) were launched: City / Town , Castle , and Space . In 1987, Lego created sub-themes within these environments, as well as introducing branding that identified a set as part of a theme. The company also produced product lines that used pieces outside of

440-440: Is an excellent example of price lining as most products sold there are $ 1. Captive pricing is a strategy drawing consumers’ interests and encouraging purchases by offering a basic product for a really low price, however, they will have to purchase additional items in order to obtain the full value of the product they have received. Although the retailer might lose profit on the first sales item, they will manage to gain it back from

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480-468: Is commonly pursued by companies due to their desire to create revenue and to advance their competitive status against rival companies. The advantages when undergoing product line extensions is that the new product or products are commonly closely related to existing products, so the company often has the appropriate production process and capacity to produce the new product or products. Issues facing product line extensions can include company's investments in

520-500: Is it creates more competition between brands. This can be good for the consumer as product prices may become more competitive, and goods may become cheaper to purchase. Increased competition generated from the extension allows the brand to gain more market share over their competitors. The brand can also benefit from an increase in exposure through this competitive process. Brand image is a big contributing factor when it comes to product line extension. Within downward extension it can make

560-526: Is known as product line filling. Product line pricing is a product pricing strategy, used when a company has more than one product in a product line. It is a process that traders adopt to separate products in the same category into various price groups, to create different quality levels in the customers’ minds. For instance, vehicle manufacturers produce their vehicles in different models including economy models, environmental models, luxury models and more. Each of them has an individual cost or price to display

600-409: Is sold with the same brand name , this is referred to as family branding . When you add a new product to a line, it is referred to as a line extension . When you have a single saleable item distinguishable by size, appearance, price or some other attribute in your product line, it is called SKU-Stock Keeping Unit. The marketing jargon for adding a product that is better quality than other products in

640-437: Is that these amounts are seen as suitable price points for a whole range of products by prospective customers. It has the advantage of ease of administering, but the disadvantage of inflexibility, particularly in times of inflation or unstable prices. Product line extension A product line extension is the use of an established product brand name for a new item in the same product category. Line extensions occur when

680-437: Is the likely rise in sales, demand and market share. Product line extension increases the amount of different products available to consumers, and through adding more products into the market it keeps consumers interested. This can be helpful in avoiding customer base loss. A company positioned in the middle market may want to introduce a lower-priced line for any of the 3 reasons An advantage to downward product line extension

720-641: The additional products that customers buy. For example, razor blades and razor manufacturers usually sell razor handles for an unbeatable price while selling additional blade cartridges at a much higher price. Captive pricing is most effective when there are no other similar products from competitors in the same price range. Bundled pricing is the approach of selling products and their accessories or other options as one product for one price. Consumers will not need to purchase each item separately but one bundled item and priced as one product. This would also be appealing to customers as normally they would be on sale and have

760-417: The brand as cheap, in the case of downward extension, or unrealistic and unreasonable in terms of upward extension. An issue also connected to the extensions, could result in the production process becoming more and more complicated as a result of new products, this could affect the company's efficiency and quality in the production of the brands product range. An advantage of extending company product lines

800-420: The brand seem less luxurious, cheap, basic, and inconsistent. In a study, the results revealed when high status brands downward extend their product line, consumers feel a sense of dishonesty and untrustworthy towards the brands image. This is as a result of luxury brands having a stereotype of being exclusive and high quality, and with the addition of a lower quality, cheaper product the consumers perceive this as

840-450: The brand would not impact the company negatively. Whereas, if Prada were to start selling a downward product line of low quality, low priced goods this would impact the brand's high status, exclusivity and luxurious image negatively. However, when introducing downward line extensions, consumers may be opted to by this cheaper option the brand is providing rather than their upward line extension goods. This introduction may negatively affect

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880-567: The company offers. A diversified product mix can target the maximum number of customers, however, such numbers of product lines requires much attention and focus as each product line targets different groups of consumers and involves individual strategy and management. Although specialisation of products (narrow product mix) might be easier for businesses to operate and manage, it reduces the ability to reach out to diverse markets as they fail to offer sufficient options for consumers to cater to their "needs and wants." The length of product mix refers to

920-546: The current products, it is considered as trading up or an upward stretch. Alternatively, if the new added item is of lower quality compared to other existing products, it is known as trading down or a downward stretch. These stretches are known as product line stretching. Supermarkets often apply product line stretching to their product lines by offering different grading of their own brand products to ensure all markets are covered for maximum interest from customers. In addition, when companies add new varieties of existing products it

960-411: The current standard product line. For example, when a lifestyle pharmacy decided to add in a high protein muesli bar into its current product line of muesli bar. Companies with an effective product line can employ product line extension in order to reach new demographic customers in different geographic areas. When a business adds a line extension to the product line and if it is of a higher quality than

1000-501: The difference in levels. With that being said, for any pricing techniques to be effective, demand elasticity, the whole product mix, product positioning strategy and the product life cycle have to be put into consideration to determine the best price for each product. Price lining is a method of pricing different products for a limited number of prices. This strategy allows ease of administering and companies are able to predict their markets of customers and profits much easier. Dollar Store

1040-403: The existing brand name. Additional high quality, high priced products can improve the image of the brand and create a new outlook within the consumer market through consumers associating the brand with its more exclusive and elite products. This can help with sales and demand if the luxury goods become quite popular and favourable. However, cheaper products may draw attention and demand away from

1080-432: The increasing amount of middle-class consumers that are becoming more capable and willing to invest their money in luxury products. Brands can adjust pricing to coincide with trends within the economy, to ensure the luxury goods do not lose too much of their consumer demand within their most popular market segments. Upward product line extension can advantage the brand through associating the new luxury product addition with

1120-459: The introduction of Creator Expert (Currently known as Lego Icons ). 2008–2009 Product line In comparison to product bundling, which is a strategy of offering more than one product for promotion as one combined item to create differentiation and greater value, product lining consists of selling different related products individually. The products in the product line can come in various sizes, colours, qualities or prices. For instance,

1160-609: The likelihood of customers purchasing new products from the company that have just been added into the product line due to the previous satisfying purchases. In marketing, the number of product lines offered is referred as the width of product mix. Product mix, also known as product assortment, is the total number of variety of products that a firm sells to their customers. It measures the total number of product lines. Some companies will focus solely and sell only one type of product that they specialise in. Also, some would offer numerous types of products for diversified markets, depending on

1200-400: The line is trading up or brand leveraging or up-market stretch . A line extension of lower quality is called trading down or down-market stretch . Trading down may reduce your brand equity by gaining short-term sales at the expense of long term sales. The jargon for "stretching the line" in both the directions is "two-way stretch". Image anchors are highly promoted products within

1240-403: The new products without the desired return. The product may come at a loss or may not be able to make enough of the return the company was forecasting for. The new addition could also send confusion to the company's customer base, and in turn negatively affect the loyalty they have for the brand. This can evidently become a long-term risk in terms of brand image, as consumers may have a new view of

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1280-440: The original price still tagged on the product to emphasize the price difference. For instance, retailers will offer a bundle deal for purchasing a new computer with its accessories, such as keyboard and mouse pad. Bait Pricing, also known as "Bait and Switch" is often considered unethical and sometimes illegal. It involves promoting items at a really low price to entice customers, with only limited supplies. Customers will come into

1320-411: The promoted products, they often end up buying additional products at their full prices. Therefore, businesses earn their profit off of the unplanned buying decisions by customers besides the loss leaders. The number of different categories of a company is referred to as width of product mix . The total number of products sold in all lines is referred to as length of product mix . If a line of products

1360-433: The quality and price to create inferior and luxury goods. These product line extensions are often closely related to existing products in a brands portfolio, but targets specific brand consumers through this approach. Product line extensions help companies identify and tend to the needs of refined target markets. If applied appropriately, their advantage within the intended market is endless. Practically, when brands apply

1400-830: The sales of their premium and more luxury goods. So while demand and increased market share may be a positive to downward line extensions, the approach may disadvantage the brands overall profit. Companies may wish to enter the high end of the market for more growth, target returning customers, higher margins, or simply to position themselves as full-line manufacturers. Many markets have spawned surprising upscale segments: Starbucks in coffee , Häagen-Dazs in ice cream and Evian in bottled water . Leading Japanese auto companies have each introduced an upscale automobile: Toyota 's Lexus , Nissan 's Infiniti , and Honda 's Acura . Note that they invented entirely new names rather than using or including their own names. Brands extending their product lines upward successfully can benefit through

1440-436: The size and objectives of the entities. Each approaches' results vary based on many factors including location, market, trends, etc. Therefore, businesses should carefully consider their product mix. The width of product mix is one of the four dimensions of product mix along with the length, depth and consistency of product mix. As mentioned above, the width of product mix is referred to as the total number of product lines that

1480-437: The standard Lego system such as Technic , Duplo and Fabuland . Since then, many new themes have been introduced and discontinued, including the inclusion of licensed themes in 1999 such as Star Wars , Wizarding World or Marvel and DC Comics . Not all sets produced are necessarily part of any official theme including store exclusive sets, one-off licensed sets, and most advanced construction sets released prior to

1520-400: The store looking for the advertised product and find out is out of stock or does not even exist, and afterward be encouraged to purchase a comparable, higher-priced product that is available in store. Similar to Bait pricing, retailers use leader pricing to entice customers to come into the stores by advertising items, the loss leaders, at a low price. When they arrive at the stores aiming for

1560-503: The total number of products sold by a company. A product line consists of many similar products defined by its functions and customer market while short product line consists of fewer related products. Customer satisfaction could be achieved through longer product lines. However, overly dense product lines may result in competition within the same line and lead to loss of revenue and customers. If product lines are too short, consumer options are limited, forcing them to switch to competitors with

1600-405: The variety of coffees that are offered at a café is one of its product lines and it could consist of flat white, cappuccinos, short black, lattes, mochas, etc. Alternatively, product line of juices and pastries can also be found at a café. The benefits from having a successful product line is the brand identification from customers which result in customer loyalty and multiple purchases. It increases

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