On the development of brand and line extensions

Although manufacturers of consumer non-durables rely on established brands when introducing new products, the implications for product development activities have not received much attention from academics. This paper seeks to increase an understanding of product development in those situations in which companies wish to extend brands to incorporate new products. Thus, drawing on a theory-building multiple case study (including 14 Danish companies and supplementary interviews with retailers and advertising agencies), this paper investigates how the focal companies actually manage development of brand-/line-extending new products. The empirical study suggests that although all of the companies rely on brand-/line-extending new products, they differ in their management of product development activities. Thus the study identifies three clusters of companies: clusters emerging on the basis of (1) whether companies ‘enact’ and ‘think’ brands in the course of product development or whether predominantly they think products, and (2) whether companies rely on the introduction of line extensions or whether they also engage in the development/launching of brand extensions. This paper discusses managerial implications for each cluster of companies and, especially, it suggests how top management and marketing managers should ‘enact’ their positioning within clusters. Although the study is qualitative and thus findings do not generalise across populations of fast-moving consumer goods (FMCG) manufacturers, it suggests that academics should acknowledge that some companies ‘think’ brands while others do not. The key contribution of the paper to extant knowledge is that it suggests actual management of line-/brand-extending product development neither corresponds well with new product development (NPD) theories nor with branding theories across all FMCG brand companies.