Harmful upward line extensionscan the launch of premium products result in competitive disadvantages?

Resumo

Companies often extend product lines with the goal of increasing demand for their products and responding to competitive threats. Although line extensions may lead to cannibalization and reduction of overall profit, the bulk of theoretical and empirical research has suggested that product line extensions result in a net gain of overall demand and market share. To mitigate cannibalization, the extant literature prescribes the addition of premium versions of products, or 'upward line extensions,' with the intention of achieving gains not only in demand and market share but also in overall profit. In this research, the authors employ analytical and empirical methods to make the case that upward line extensions aimed at matching a competing product's attribute may lead consumers to reassess their perceptions about the brand and the attributes of products in the market in a way that erodes the advantages of the extending firm. Ultimately, this can result in a loss of demand, market share, and profit for the extending firm.

Ficha do documento

Tipo

Artigo científico

Ano

2015

Instituição

Amer Marketing Assoc

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1509/jm.14.0100

Identificador

oai:repositorio.fgv.br:10438/23542

Temas

EconomiaEducação

Palavras-chave

AnchoringConsumer learningLine extensionPositioningSpillover effectsEconomiaConsumidores - EducaçãoVantagem competitiva