Launching a new product to the market is a big gamble on the part of a manufacturer or distributor. This is so because substantial investment would have to be spent in marketing and advertising this new item. This activity is very crucial as this is how prospective clients or target customers are informed about the product.

Without these promotional activities, it would be very difficult, or impossible even, to create demand for the product once it hits the stores and other retail outlets. Likewise, these promotional activities would also have to be done in a regular basis to maintain customer demand especially in the early stages of product distribution.

These days, new products are introduced either as a brand extension or a product extension. Brand extension, also called as brand stretching, is a well-used marketing strategy wherein the company uses an existing brand to market a new product that is usually belonging to another product category. This is usually done by companies to use sustained brand equity or a brand's long-term sustainability and net worth to their advantage.

The effectiveness of brand extension however, depends on how consumers strongly relate to the values and goals of certain brands. In the 1990s, it was revealed that about 81% of the new products in the market were launched through this strategy. This was seen as an effective way of reducing financial risk resulting for promotional activities as well as improving the perception of consumers on core brand value. Nevertheless, companies that use brand extension as a strategy should still be focused on the successful launch and promotion of new product as this may also potentially damage brand equity or lower the value of core brand.

A new product may also be launched as a product extension. This marketing strategy paves way for the introduction of a new product serving another market segment but is closely associated with an existing product. In short, it is a new version of the parent product. Several firms have taken on this strategy to take advantage of brand awareness and brand loyalty. Normally, consumers are likely to buy a new product if it carries with it a brand name that they trust. Among the companies that have successfully implemented this is Coke when it launched its Diet Coke product.

Unfortunately, brand extension or product extension is not a recourse that all companies can use. Many companies have had to start from scratch as they come up with new and innovative products to offer the public. For these companies, it is mandatory that their managers should come up with new product metrics that they can use to assess how well the product is doing in terms of sales and market reach. In addition, these metrics will provide an accurate information support that managers can use as basis for their future actions regarding their new product offering.