Extending Existing Products
Business: Edexcel IGCSE, topic 4.3.6
Extension Strategies
To try to prevent or delay (postpone) a product (or service) from reaching the stage where sales start to decline, businesses can try different extension strategies.
Update packaging or rebranding
- Updating packaging can help to keep a product fresh in consumers’ minds. This is a common way that businesses try to keep consumers’ interest in a product.
- For example, Coca Cola have put people’s names and the names of places on their bottles of Coca Cola and Diet Coke.
- In 2002, British Airways spent £60m rebranding its brand and products. It changed the logos on its planes and changed the business’ strapline.
Adding more/different features
- Adding more or different features can keep people interested.
- The FIFA video game was first released in 1993. Every year, EA Sports update the game to have better new features. This can attract new customers and help keep existing customers.
- Chocolate manufacturers often do this to increase sales. Wispa was a successful product, so Cadbury launched Wispa Gold (which contained caramel).
Changing the target market
- Businesses can target new markets in an attempt to keep demand (and sales) high. Businesses can enter the same market in a different country or target a different age range in the same country.
- In 2014, the sports brand, UnderArmour won a Marketer of the Year award for its “I will what I want” campaign targeted at women.
Advertising
- Heavily advertising a product can help to keep the demand for a product high. New advertising campaigns can also help to change the product image slightly and attract different customers.
- Lots of companies pay £3.5m for a 30 second advert that is shown on US TV during the Superbowl. These adverts can reach an audience of over 110m people. In the UK at peak times (7pm - 9pm), a 30 second advert usually costs between £10,000 and £30,000.
Test yourself on Extending Existing Products
Coca Cola have put people’s names and the names of places on their bottles of Coca Cola and Diet Coke. Which extension strategy is this an example of?
UnderArmour's 2014 "I will what I want" campaign aimed at females was an example of what type of extension strategy?