How to Test Product Line Extensions Before Investing in Inventory
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 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. In the last ten years, products have proliferated in every category of consumer goods and services, and the deluge shows few signs of letting up.Most companies are pursuing product-expansion strategies in particular, line extensions full steam ahead.
Product Risk with Line Extensions
The following are the risks that are associated with the line extentions
- Expanded line without any clear cut role leads to confused customers and confused retailers
- Brand loyalty is weakened
- Variants are copied with an intention to neutralize competition
- The relationship between the marketer and trade partners gets strained
- Ling extensions may act as a serious drain on company resources
- Line extensions do not have positive effect on demand creation
- A lot of invisible costs are associated with line extension
To gather more information and avoiding risks before making a big decision about your product line following ways are helpful
- Leverage no-inventory-required options
- Gather audience feedback
- Test new products in small quantities
Nowadays, there are many ways to gather information for the next move for your business even without paying for expensive market search.A small investment in learning about it and product testing. It can be helpful and would help avoiding over investment in a product which would not even sell and would ultimately fall you into loss. When you are moving towards your next step to profit without a mindset is the most foolish thing you would do. So to avoid such things while there is risk in running a business. To avoid it manage it properly as much as possible to reach the smart approach.