Extension Strategies
Extension Strategies
Definition and Purpose
- Extension strategies are methods used by businesses to prolong the life cycle of a product and delay its decline.
- The main objective is to maintain revenue and profitability for as long as possible.
Types of Extension Strategies
Product Development
- This involves introducing new features or improving the existing ones in a product.
- For instance, a software company might add new functionalities to its existing product.
New Market
- This strategy attempts to appeal to a new demographic or geographic market.
- For example, a clothing brand might start selling in a different country or to a different age group.
Promotion
- This implies a company changing its advertising or pricing strategies to attract more customers.
- This could involve more intense advertising or bundling products with a price discount.
Rebranding
- Businesses might decide to change aspects of the brand or product, like packaging, logo or name.
- It could help breathe new life into a product if the current branding isn’t appealing to consumers anymore.
Importance of Extension Strategies
- Extension strategies help to increase the lifespan of a product and delay the point at which it falls into decline or is discontinued.
- They can be a cost-effective way of maintaining a product in the market.
- They can give businesses extra time to develop new products and transition smoothly without losing revenue.
Risks and Challenges
- There can be significant costs associated with implementing extension strategies.
- There is also a risk that the strategy will not be successful and the product will still decline.
- Additionally, extension strategies might only work for a limited period and may even dilute the brand value if not implemented effectively.