Product line extensions: causes and effects

Kostas Axarloglou

16 citations0/0 files storedManagerial and Decision Economics

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Consumer Market Behavior and Pricing Merger and Competition Analysis Firm Innovation and Growth

Abstract

Abstract In this paper, and using data from a sample of five US manufacturing industries, we study the implications of market demand growth on product line extensions and the effects of the latter on industry profit margins. Companies extend their product lines in response to expansions in market demand and this tends to depress profit margins in the industry. Finally, these results are quantitatively significant. Copyright © 2007 John Wiley & Sons, Ltd.

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References

1979Monopolistic Competition with Outside Goods 1986A Supergame-Theoretic Model of Price Wars during Booms 1978Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry 1990The Economics of Product Variety: A Survey 1984Market Segmentation, Self-Selection, and Product Line Design 1990Broader Product Line: A Necessity to Achieve Success?1986Business Cycles and the Relationship between Concentration and Price-Cost Margins 1999Product Proliferation: An Empirical Analysis of Product Line Determinants and Market Outcomes

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2020Effect of core and peripheral product line extensions on overall product line revenue

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