Question

You are working in the marketing department of a health plan that seeks to increase penetration in the Hispanic market segment. You need to decide if it would be better to market a new line under a new brand name or use the existing brand name under a line extension strategy. List the advantages and disadvantages of each strategy and present your recommendations.

Answer 1

Marketing a new line under a new brand name is advantages as this will provide an altogether fresh start, with no previous preconceived notions. However, the disadvantages of this strategy will be that since this will be new brand more cost will be required in making the product public. People might be skeptical about using a product of a new brand. I would recommend using the new line with a brand that is well known by a merger of my brand. Launching the new line by using a powerful well know brand will lead to greater market penetration at a low cost.