Line Extension and Brand Extension: A Cause for Intra-Firm Competition

Many "new" products enter the marketplace each year. Most of these products are not genuinely new or innovative. One estimate places the number of truly new products at less than ten percent. The other ninety percent are modified or repositioned products. A survey of new consumer products found that about ninety percent were introduced as line extensions. About five percent were introduced as brand extensions and only fewer than five percent were introduced with a new brand name. Despite the popular use of line extensions in practice, relatively little academic research has focused on consumers' responses to line extensions.
Line extension and brand extension are two different things where it address the marketing of commercial goods where brand extension refers to the recognized product or company name such as Kraft, Pepsi or Apple and so on. It is the way in which the company expands its inventory determines line extension vs. brand extension.

Line Extension
Line extension refers to the expansion of an existing product line. For instance, a soft drink manufacturer might introduce a "Diet" or "Cherry" variety to its cola line, while a toy manufacturer might introduce new characters or accessories in its line of action figures. In short, line extension adds variety to its existing product for the sake of reaching a more diverse customer base and enticing existing customers with new options.
Brand Extension
Brand extension refers to the expansion of the brand itself into new territories or markets. For instance, if a soft drink manufacturer unveils a line of juices or bottled water products under its company name, this would constitute an example of brand extension. The brand, or company, is an established name, and so the name alone can serve to drive customers to try new products completely unrelated to the older product lines.
Benefits
A line extension can reinvigorate a product line, bringing it