Directorate of distance education

Up-Market Stretch
Companies may wish to enter the high end of the market for 
more growth, higher margins, or simply to position themselves as full-
line manufacturers. Many markets have spawned surprising upscale 
segments: Starbucks in coffee, Haagen-Dazs in ice cream and Evian in 
bottled water. Leading Japanese auto companies have each introduced an 
upscale automobile: Toyota’s Lexus, Nissan’s Infiniti, and Honda’s Acura. 
Two-Way Stretch
Companies serving the middle market might decide to stretch 
their line in both directions. Texas Instruments (TI) introduced its first 
calculators in the medium-price-medium-quality end of the market. 
Gradually, it added calculators at the lower end taking the share from 

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Bowmar, and at the higher end to compete with Hewlett-Packard. This 
two-way stretch won Texas Instruments (TI) an early market leadership 
in the hand-calculator market.
Trading Up/ Trading Down
Introduction of more expensive products than the original line is 
“trading up”. Introduction of cheaper products than the original line is 
“trading down.” Both may give an imbalance between the new and old 
lines but for different reasons.
Trading Up
When trading up, the biggest hurdle to overcome is the gaining of 
acceptance for a higher-priced product identified with a low-price-line 
image. Watchmakers like Timex, and certain camera manufacturers have 
tried unsuccessfully to penetrate the higher-priced end of their markets. 
Sometimes higher-priced products are introduced mainly to pull up the 
prestige of the lower-priced goods.
Trading Down
When trading down, sales of the new product often are not great 
enough to offset reduced sales of the original higher-priced line. Mustang 
cut heavily into Fairlane sales but fortunately obtained enough volume to 
overcome the loss, plus contributing more total profits. Few new products 
manage to accomplish this.