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Product line extensions: causes and effects

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  • Kostas Axarloglou

    (Democritus University of Thrace, Komotini, Greece)

Abstract

In this paper, and using data from a sample of five US manufacturing industries, we study the implications of market demand growth on product line extensions and the effects of the latter on industry profit margins. Companies extend their product lines in response to expansions in market demand and this tends to depress profit margins in the industry. Finally, these results are quantitatively significant. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Kostas Axarloglou, 2008. "Product line extensions: causes and effects," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 9-21.
    • Handle: RePEc:wly:mgtdec:v:29:y:2008:i:1:p:9-21
    DOI: 10.1002/mde.1369
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    Cited by:

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    3. Sarangi, Subrat & Chakraborty, Abhishek & Triantis, Konstantinos P., 2021. "Multimarket competition effects on product line decisions – A multi-objective decision model in fast moving consumer goods industry," Journal of Business Research, Elsevier, vol. 133(C), pages 388-398.

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