Brand Strategy & Architecture

Line Extensions: Risk vs. Reward

Extensions can grow penetration or just clutter the shelf. This quiz helps you spot the risks and rewards of stretching a line.

A core risk of frequent line extensions is ______.

automatic shelf gains

faster trademark approval

simpler forecasting

cannibalizing high‑velocity base SKUs

Extensions can steal volume from existing items instead of adding buyers. That reduces total profit if costs rise without incremental sales.

Which outcome signals a healthy line extension?

incremental penetration from a new need state or segment

lower brand awareness

identical buyers switching flavors only

only higher coupon redemption

Healthy extensions bring in new buyers or occasions. They create true expansion, not just rotation of existing volume.

Which guardrail reduces brand‑dilution risk when stretching into a new form?

abandon all brand codes

maintain distinctive brand assets and a clear fit to the parent promise

use unrelated category cues

copy a competitor’s look

Consistency helps consumers link the new item to trusted equity. A credible fit avoids confusing what the brand stands for.

Retailers often require proof of what before granting extra facings for extensions?

corporate tax rate

ad recall alone

expected velocity and incremental category growth

employee satisfaction

They want items that move quickly and grow the aisle, not clutter it. Sell‑in improves when you show projected incrementality.

Which metric best flags SKU bloat from too many extensions?

gross margin % alone

long tail of items below velocity thresholds

number of colors offered

shipment lead time

A concentration of slow movers strains working capital and space. Culling below‑threshold SKUs restores focus.

What pricing role do extensions commonly play?

eliminate promotions forever

replace the masterbrand name

create a ladder (good/better/best) without undermining the flagship

reset the corporate share price

A ladder attracts different budgets while protecting the core offer. Clear pricing architecture prevents accidental trade‑down.

A typical failure pattern for far brand stretches is ______.

low trial due to poor category fit and weak credibility

legal bans on advertising

instant dominance from name alone

too much product quality

If the stretch doesn’t make sense, shoppers hesitate to try it. Equity usually can’t overcome a mismatch in expectations.

Which research readout most directly supports extending a flavor line?

number of SKUs already on shelf

CEO preference

distinctive‑asset recognition plus stated trial interest above benchmark

historic ad spend

Strong linkage to the parent and above‑norm intent reduce risk. Together they indicate the extension will be remembered and sampled.

What’s a sensible sequence for pruning after an extension wave?

rename everything annually

keep the top movers, cut the tail, and consolidate packaging where possible

drop the flagship first

eliminate all promotions

Focusing on winners keeps equity strong and supply efficient. Simplification also frees budget for the best bets.

Compared with radical new brands, line extensions usually have ______ launch costs and ______ speed to trial.

similar; slower

lower; faster

higher; slower

zero; identical

Extensions borrow distribution and equity from the parent. That reduces spend and accelerates early adoption.

Starter

Focus the line on hero SKUs and define guardrails before adding more.

Solid

Strong instincts—prove incrementality and prune the tail.

Expert!

You balance growth and discipline like a category captain.

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