"We call line extension a 'trap', not a mistake. Line extension can work if...But it's a big if. If your competitors are foolish. If your volume is small. If you have no competitors. If you don't expect to build a position in the prospect's mind. If you don't do any advertising. The truth is, many products are sold, few are positioned...we offer some rules of the road that will tell you when to use the house name and when not to.
1. Expected volume. Potential winners should not bear the house name. Small volume products should.
2. Competition. In a vacuum, the brand should not bear the house name. In a crowded field, it should.
3. Advertising support. Big-budget brands should not bear the house name. Small-budget brands should.
4. Significance. Breakthrough products should not bear the house name. Commodity products such as chemicals should.
5. Distribution. Off-the-shelf items should not bear the house name. Items sold by sales reps should.
