Line Extensions Vs.Product Modifications

Do you think its more beneficial to do a line extension, or product modification? Line extensions are the development of a product closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs. As Product modifications means changing one or more characteristics of a product. When do you believe this is a crucial stage in a product life to do either line extension or product modification. Do you believe one will cost more than the other? Or are they the same price due to the stages they occur in a product life cycle?