Featured Research

from universities, journals, and other organizations

How businesses can maximize revenue when introducing new products

Date:
May 7, 2014
Source:
University at Buffalo
Summary:
Companies should use existing brand names and add new, sub-brand names to maximize revenue when introducing new products to market, according to a new study.

Companies should use existing brand names and add new, sub-brand names to maximize revenue when introducing new products to market, according to a new study from the University at Buffalo School of Management.

Related Articles


Forthcoming in Management Science, the study notes a proliferation of new products in the consumer packaged-goods market each year. For example, U.S. manufacturers introduced more than 150,000 new products in 2010 alone. Of these, more than 90 percent were extensions of existing brand-name products.

"These new products can be line extensions, like when Pepsi introduces another type of soda, such as Pepsi Lime, or brand extensions, like when a toothpaste brand such as Crest introduces a mouthwash product," says study co-author Debabrata Talukdar, PhD, professor of marketing in the UB School of Management.

"Given the significant investment and high failure rates of product-extension launches, deeper insight into the impact of these brand-development strategies can be very valuable," Talukdar adds.

The study analyzed 155 new product extensions introduced to 20 markets across the U.S. Researchers investigated the market performance of the new products and the effects that introducing them to the market had on their parent brands.

"We found that brand extensions generate positive overall revenues," says study co-author Ram Bezawada, PhD, associate professor of marketing in the UB School of Management. "In addition, sub-branding, where a new brand name is used to help consumers distinguish from the parent brand, such as Gillette Mach3, generates greater revenues for a typical brand extension."

Past studies have investigated the effects of introducing new product extensions, but have not evaluated the aggregate market impact of these effects across different brand-development strategies or accounted for the strategic decision to introduce the extension. The scope and analysis approach of this study provide more general insights for manufacturers to better introduce and manage new product extensions.

Bezawada and Talukdar collaborated on the study with Vijay Ganesh Hariharan, assistant professor of marketing in the Department of Business Economics at the Erasmus School of Economics.


Story Source:

The above story is based on materials provided by University at Buffalo. The original article was written by Kevin Manne. Note: Materials may be edited for content and length.


Cite This Page:

University at Buffalo. "How businesses can maximize revenue when introducing new products." ScienceDaily. ScienceDaily, 7 May 2014. <www.sciencedaily.com/releases/2014/05/140507114807.htm>.
University at Buffalo. (2014, May 7). How businesses can maximize revenue when introducing new products. ScienceDaily. Retrieved April 1, 2015 from www.sciencedaily.com/releases/2014/05/140507114807.htm
University at Buffalo. "How businesses can maximize revenue when introducing new products." ScienceDaily. www.sciencedaily.com/releases/2014/05/140507114807.htm (accessed April 1, 2015).

Share This


More From ScienceDaily



More Science & Society News

Wednesday, April 1, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Be Careful, April Fools' Day Is Alive And Well

Be Careful, April Fools' Day Is Alive And Well

Newsy (Apr. 1, 2015) You’re going to want to double-check anything you see on the Internet today. If it sounds too good or too weird to be true, it probably is. Video provided by Newsy
Powered by NewsLook.com
Liberia Sees Resurgence of Drug Trafficking as Ebola Wanes

Liberia Sees Resurgence of Drug Trafficking as Ebola Wanes

AFP (Apr. 1, 2015) The governments of Liberia and Sierra Leone have been busy fighting the menace created by the deadly Ebola virus, but illicit drug lords have taken advantage of the situation to advance the drug trade. Duration: 01:12 Video provided by AFP
Powered by NewsLook.com
Models in Masks Highlight Indonesian Environmental Devastation

Models in Masks Highlight Indonesian Environmental Devastation

AFP (Mar. 31, 2015) Wearing gas masks and designer dresses, models condemn the fashion industry&apos;s role in causing environmental devastation. Duration: 00:40 Video provided by AFP
Powered by NewsLook.com
The Future Of Japanese Whaling: Heritage Vs. Conservation

The Future Of Japanese Whaling: Heritage Vs. Conservation

Newsy (Mar. 30, 2015) In 2014, the International Court of Justice ruled Japan could no longer engage in whaling in the Antarctic, but Japan has plans to return this year. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins