The interplay of innovation, brand, and marketing mix variables in line extensions

Abstract

Although marketers often introduce product innovations using line extensions, extant research provides little empirical evidence on whether and how this product strategy pays off. The objective of this study is to examine the effects of innovation and the relative roles of brand and marketing mix variables in the success of new line extensions. Using data from 196 new line extensions across 23 consumer packaged goods categories, the authors employ a two-stage approach to assess how innovation and parent brand strength impact line extension trial purchase. The authors find that innovative line extensions tend to have a higher level of average trial probability. The strongest marketing driver for successful innovative line extension introductions is parent brand strength. Non-innovative line extensions gain higher trial from greater distribution. The results offer guidance on how managers can better utilize brand strength and the marketing mix when employing a line extension strategy.