Directorate of distance education

Product Positioning
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Some positioning strategies will work better than others. The best 
positioning plays to your company’s strengths and the product’s strengths, 
and away from weaknesses. Position your product to reach the buyers 
whose profiles most closely match needs you serve, in the channels you 
can reach, at the prices you set.
Product Line Extension/Contraction
A 
product line extension
is the use of an established product’s 
brand name for a new item in the same product category.

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Notes
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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. This is as opposed 
to brand extension which is a new product in a totally different product 
category.Line extension occurs when the company lengthens its product 
line beyond its current range. The company can extend its product line 
down-market stretch, up-market stretch, or both ways.
Down-Market Stretch 
A company positioned in the middle market may want to introduce 
a lower-priced line for any of the three reasons:
1. The company may notice strong growth opportunities as mass 
retailers such as Wal-Mart, Best Buy, and others attract a growing 
number of shoppers who want value-priced goods.
2. The company may wish to tie up lower-end competitors who might 
otherwise try to move up-market. If the company has been attacked 
by a low-end competitor, it often decides to counterattack by 
entering the low end of the market.
3. The company may find that the middle market is stagnating or 
declining.