EMBA 1ST SEMESTER

MARKETING THEORY & PRACTICE MGT 410

ASSIGNMENT#02

SUBMITTED TO: SIR ZARAK KHAN

SUBMITTED BY: MUHAMMAD USMAN
REG. NO: SP15-EMBA-290
EMAIL: sp15emba290@vcomsats.edu.pk
DATED: 8-05-2014

Task

Differentiate between line filling and line stretching. Provide examples from the products that
exist in the Pakistani Market.

Difference between Line filling and Line stretching

There are two ways for a company to lengthen its product line;
1. Line stretching
2. Line filling
Following paragraphs would clearly differentiate the two terms with the help of examples;

Line stretching occurs when a company lengthens its product line beyond its current
range. Line stretching decision depends on three situations;

Down-market Stretch
A company positioned in the middle market may want to introduce a lower price line i.e.
Mercedes successfully introduced its C-Class cars at Rs.5,000,000 without injuring its
ability to sell other Mercedes cars for Rs. 10 million and up.

Up-market Stretch
A company enters the high social class segment for more market growth, higher margins,
as full line manufacturers e.g. Starbucks in coffee and Toyota Lexus etc.

Two-way Stretch
A company serving the middle market might decide to stretch their line in both lower and
high social class i.e. Holiday Inn Worldwide performed five different segments the
upscale Crown Plaza, the traditional Holiday Inn, the budget Holiday Inn Express, and
the business-oriented Holiday Inn Select and Holiday Inn Suites.

Line filling occurs when a company adds more items within the present range. The motives
are to overcome the missing items in the line, reach the incremental profits, utilize excess
capacity, and plug holes to keep out competitors. Many businesses use line filling to round out an

already well-established product line and to help increase the market success of new related
products. There are few ways in which line filling strategy can be implemented;

Product proliferation
The introduction of new varieties of the initial product that is similar. For example introduction
of chili sauce from shezan ketchup manufacturers.

Brand extension
Strong brand preference allows the company to introduce the related product under the brand
umbrella. For example Rafhan foods introduce Rafhan jelly and Rafhan pudding besides its main
Rafhan custard brand.

Private branding
Producing and distributing a related product under the brand of a distributor or other producers.
For example, Sitara textiles produce a less expensive cotton brand to be sold at selected outlets.
Key points to be noted are that;
A line stretching strategy should only be considered when the producer is certain that the
capability exists to efficiently manufacture a product that compares well with the base
product.
Line-filling strategies should be used when a gap in the existing product line has not been
filled or a new gap has been created due to the activities of competitors or the demands of
consumers.