Sign up to access the complete lesson and track your progress!
Unlock This CourseImagine your favourite chocolate bar suddenly disappeared from shops forever. That would be pretty disappointing, right? Well, businesses don't want their products to disappear either! Extension strategies are clever ways that companies keep their products popular and profitable for longer periods.
Every product goes through what we call a 'product life cycle' - it's born (introduction), grows up (growth), reaches its peak (maturity) and eventually gets old (decline). Extension strategies are like giving products a makeover or a new lease of life to stop them from declining.
Key Definitions:
Businesses invest millions in developing new products. Extension strategies help them get the most value from this investment by keeping products profitable for longer. It's much cheaper to extend an existing product's life than to create something completely new from scratch.
The first part of the marketing mix we'll explore is the product itself. There are several ways businesses can modify their products to give them a fresh appeal and attract new customers.
Companies can breathe new life into their products by making changes that appeal to existing customers or attract new ones. These modifications can be small tweaks or major overhauls.
Adding new flavours, colours, or varieties keeps customers interested. Think about how Coca-Cola introduced Cherry Coke, Diet Coke and Coke Zero to appeal to different tastes and health concerns.
Adding new features or improving existing ones can make products more attractive. Mobile phones constantly add new features like better cameras, longer battery life, or faster processors.
Fresh packaging can make old products look new again. Seasonal packaging, eco-friendly materials, or convenient new formats can all boost sales.
Kit Kat, originally just a chocolate wafer bar, has extended its life cycle brilliantly through flavour innovation. In Japan alone, there are over 300 different Kit Kat flavours including green tea, wasabi and even sake! This strategy has helped Kit Kat maintain relevance and excitement in a crowded confectionery market for decades.
Price is a powerful tool for extending product life cycles. By adjusting prices strategically, businesses can attract new customer segments or encourage existing customers to buy more.
Pricing strategies can help products appeal to different market segments and compete more effectively against rivals.
Lowering prices can attract price-sensitive customers and compete with cheaper alternatives. However, businesses must be careful not to damage their brand image or profit margins too much.
Buy-one-get-one-free deals, multi-packs, or bundling products together can increase sales volume and attract bargain hunters without permanently reducing the product's perceived value.
Sometimes products just need better marketing to reach their full potential. Promotional extension strategies focus on communicating with customers in new and exciting ways.
Fresh promotional campaigns can introduce products to new audiences or remind existing customers why they loved the product in the first place.
Updated adverts with modern themes, celebrity endorsements, or social media campaigns can make old products feel current and relevant to younger audiences.
Sponsoring sports events, music festivals, or TV shows can put products in front of new audiences and create positive associations.
Partnering with social media influencers or celebrities can introduce products to their followers and create buzz around established brands.
Old Spice was seen as an old-fashioned brand for older men until 2010. Their humorous advertising campaign featuring Isaiah Mustafa completely transformed their image, making them cool and appealing to younger customers. Sales increased by 125% in just one year, proving how powerful promotional extension strategies can be.
Where and how products are sold can significantly impact their success. Place extension strategies involve finding new ways to get products to customers.
Making products more accessible or available in new locations can tap into previously unreached customer segments.
Expanding into new geographical areas, different types of shops, or online platforms can expose products to fresh customer bases. Many UK brands have extended their life cycles by expanding internationally.
Adding e-commerce capabilities or selling through online marketplaces like Amazon can reach customers who prefer shopping online, especially important after the COVID-19 pandemic changed shopping habits.
Not all extension strategies work and businesses need to measure their effectiveness to make smart decisions about future investments.
Companies use various metrics to determine whether their extension strategies are working and worth the investment.
The most obvious measure is whether sales have increased or stabilised after implementing the strategy. Companies track both volume and revenue.
Has the product gained or maintained market share compared to competitors? This shows whether the strategy is helping the product compete effectively.
Extension strategies cost money to implement. Companies must ensure the increased sales generate enough profit to justify the investment.
McDonald's introduced all-day breakfast in 2015 as an extension strategy when sales were declining. The move was hugely successful, increasing sales by 5.7% in the first quarter after launch. This place strategy (changing when products were available) helped McDonald's compete better with rivals and gave customers what they wanted - Egg McMuffins at 3pm!
While extension strategies can be very effective, they're not magic solutions. Businesses need to understand their limitations and potential risks.
Sometimes products reach the end of their natural life cycle and no amount of marketing magic can save them. Understanding when to let go is just as important as knowing when to fight.
If customer needs have fundamentally changed or new technology has made products obsolete, extension strategies might just delay the inevitable. Think about how smartphones made MP3 players largely irrelevant.
Extension strategies are powerful tools in the marketing mix that can help businesses maximise the value of their products. By cleverly adjusting products, prices, promotion and place, companies can keep their offerings fresh and relevant for much longer than they might naturally last. The key is choosing the right strategy for the right product at the right time and always measuring the results to ensure the investment is worthwhile.