Choosing between line extensions and second brands: the case of the Australian and New Zealand wine industries Available to Purchase

When managers launch a new product line into a category already served, they must decide whether to launch this as a line extension or as a second brand. This research seeks to identify how this decision is influenced by the position of the original product and the options available for positioning the new product. A model of the influences on brand and line extension success is developed and used to formulate a series of competing hypotheses about the factors that influence the decisions of managers. These hypotheses are tested using survey data from producers in the Australian wine industry. The results suggest managers seek to exploit the benefits available from the transfer of attributes to the new line, and minimise the risk of cannibalisation.