Friday, March 5, 2010

Product Line Stretching

The definition of product line stretching is essentially, introducing new products into a product line. This means that company produce more products in different ranges; from higher end to lower end products. For example, Toyota is generally a company that produces durable (questionable) and low-price cars. The way Toyota is product line stretching is by creating a new higher end brand, Lexus. This model has increased Toyota's sales and allowed them access to different markets. Also, they are able to access new customers who are looking for a higher end trustworthy car. Lastly, Toyota has been able to scare-off competitors and improve their reputation.
Product line stretching also has been effective for Converse. They have been able to create many versions of their Chuck Taylor shoes. They range from $130 shoes that are sold in stores like Barney's, to $30 shoes that can be sold in stores like Target. We have gotten a chance to hear from a Chief Marketing Director who spoke about how they have managed to more than double sales because of this product line stretching. They have been able to tap into new segments and target different types of customers. Converse's higher end shoes have been able to target higher up customers that are looking for a more expensive shoe, but still like Converse's shoes. This hasn't diluted the companies image because they are able to maintain sales for their lower end Chuck Taylors.
Product line stretching has allowed both Toyota and Converse to reach new segments and customers that have increased their sales and reputation. Product line stretching is now always effective for companies to use, but in these two cases it has proven to be successful.













By: Hussein Zayan, Section E

6 comments:

  1. You should try to find examples that we didn't discuss in class.

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