In the last few years’ products are proliferated; there are lots of products in the same product line to satisfy the needs of the customers. Different companies are using different strategies to increase their market share. In particular, line extension is one of the strategies that are used by the companies to attract more and more customers thus increase customer base. Extension is considered as low cost and low risk strategy that can
satisfy the needs of the customers by providing a wide variety of products under one umbrella. Moreover, it is used in order to increase sales for short term purpose and to get competitive edge by showing existence in the market.
Reckitt Benckiser is British Multinational Corporation of UK, founded in 1814. Basically it was formed by two big mergers between Reckitt & Sons and J&J Colman and Reckitt & Colman and Benckiser in 1938 and in 1999. It is considered as the largest producer of household cleaning goods. It serves in area of consumer health care products, personal products and household products. Reckitt Benckiser has a list of well-known brands like Dettol (soap), Strepsils (sore throat medicine), Air Wick (air freshener) and Clearasil (skin care product) around the globe. Reckitt Benckiser is operating in almost all countries and provides products to satisfy their customers. Dettol soap is one of the famous brands of Reckitt Benckiser sold worldwide. Beside this, Dettol soap is famous brand in Pakistan considered as hygienic soap that protect customers against germs. They always focus on making their products innovative, cost effective and fast to market. They consult with consumers while developing their products and make continuous improvement that helps in creating positive image in the minds of the customers.
Previously the market segment of Dettol soap is less than its competitors because they were catering only health conscious people. Most of the people do not like the fragrance of soap, actually the fragrance of Dettol and switch towards other brands. Recently, after realizing this phenomenon, Dettol soap has launched Dettol re-energize soap with germ protection and smell of orange. The innovative formula of soap, not only protects beauty rather give full time protection and makes feel healthy. It is for whole family and gives superior protection against germs and re-energizes the strength. After introducing new soap, the image of Dettol soap has changed but nobody knows that this extension will sustain the image and sales of Dettol or not.
1. What do you think, how the sales of Dettol soap will be affected by line extension and what will be the effect on overall image of Dettol soap? (15 Marks)
Solution: There would be positive effect on the sales of Dettol soap. because people already have strong trust on Dettol soap due to its effect on beauty and health protection. but the group of people who don not like the Dettol soap, reason is, because they don not like the fragrance of product.
now they have improved the fragrance of product with the smell of orange
so in conclusion,now people don’t have any issues regarding fragrance of product. and sales and market share will go up.
2. What would be the effect of line extension of Dettol soap on its current market share? (5 Marks)
A product line extension is the use of an established product’s brand name for a new item in the same product category.
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.DOWNLOAD SOLUTION HERE