89% of Companies are Prioritising Line Extensions – Daily Business

Line extensions allow businesses to introduce variations of a product, with less risk. Costs are lower due to existing infrastructure, and catering to buyer needs is easier. This tactic is becoming increasingly popular, with 89% of companies currently taking advantage.

80% of New Ideas Fail

Across retail and consumer goods, 80% of new launches fail within the first two years. Line extensions, which involve taking a product and changing either the colour or the style, have a 60% survival rate. Taking the initial item and repackaging it doubles the mathematical chance of success. Evidence of this can be seen across multiple sectors. In retail, Stanley’s 40oz Quencher Tumbler saw a spike in sales due to its innovative design.

They released the same flask in gradient finishes and limited-edition colours and partnered with Starbucks in 2024. By keeping the mold identical, production costs plummeted, but a single product line could be scaled. This principle works much the same way in adjacent industires.

In entertainment, for instance, the enduring popularity of The Walking Dead franchise is essentially one long-running example of line extension. The network didn’t retire The Walking Dead after viewership declined. They built out a universe, using the same cast members, world, and format, but with a new story. This resulted in 8 seasons of Fear the Walking Dead and The Ones Who Live.

Online casino games like the Big Bass franchise provide further proof of this concept. The original game was popular, and as a result, 18 spin-offs were created, including Big Bass Splash and Big Bass Megaways.

It’s a reliable psychological phenomenon. You don’t even need to have played the game or used the product before; just by seeing how many variants in the line there are already, you get the sense that it’s a brand worth its own longevity, and this in turn may convince you to complete a transaction.

Protecting Profit Margins when Scaling

As a business spends 80% less on audience education when expanding a product line, the capital saved can go into the company’s net profit. Data from the American Marketing Association shows that there’s a 60.6% probability of immediate adoption for line extensions.

Businesses that grow product lines are not being passive; they are choosing a strategic path that results in aggressive growth. Those who want to expand existing product lines should be aware of the risk involved. Spreading a brand too thin will result in it losing its focus.

Overwhelming shoppers with endless variations will lead to buyer confusion. Launching products that do not reflect the price point or the expected quality of a brand is also a concern.

When launching variations, marketing is key. Insistent marketing for a line extension adds authority, which is essential for a successful campaign. Cross-promoting and using social media to alert people about the addition is important, as is offering introductory deals, or bundling the new item with the original product can work. Soft launches in smaller regions help to eliminate issues before large public rollouts.

Understanding whether a line extension or brand extension is better is also important. Coca-Cola launching Cherry Coke and Diet Coke would be a line extension, but Yamaha making motorcycles and then going on to make guitars and pianos is a brand extension. The best one for your business will depend on market penetration, profitability, brand voice, and investment ability.