Multiplicity: All about Expanding your Product Line


Do you appreciate the abundant variety of Starbucks menu selections? If yes, then you are undoubtedly in good company.

As the holiday season approaches, an assortment of festive drinks and special bakery favorites are being unveiled on the menu (again). Why does a company like Starbucks keep changing and expanding its product line -- other than luring you into their stores with more yummy treats?

Let's take a look at the reasons and the strategies to add additional products successfully.

Product Line Extension

A product line is a group of related products created and manufactured by a single business and a product line extension is a new product that is slightly different to a company’s existing range. Line extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, sizes, colors, forms, added ingredients, packages, etc. to introduce more choices to consumers.

For example, Starbucks has grown from a single product, coffee, to an assortment of different types of coffees and other items -- drip brewed, lattes with or without flavors, cappuccino, and espresso.

They have also created new products by joining up with some other successful companies. The company has further expanded into material products including the following: coffee cups and mugs, coffee makers and french presses. Each new product, like the coffee cups, help boost awareness of the company name even more.

In the computer software business, a product line extension could be an upgrade or revision, and other possible product extensions are product re-positionings and additions to existing products.

Product Line Extension is not Brand Extension

Line extension strategy is not the same thing as brand extension strategy, which refers to introducing a new product or product line in a completely different product or service category than the company's current one. Brand extension is a more radical departure from the company's core business. Companies undertake this strategy when they believe their brand image is powerful enough to get customers to try the new product or service in a completely different category. Brand extension is a riskier strategy than line extension, because the company is marketing outside its traditional core business that it has been successful with in the past.

Top 10 Reasons to Expand a Product Line

1. Meet your customers' evolving needs

2. Reach new audiences

3. Stay relevant

4. Enhance customer loyalty

5. New marketing opportunities

6. Increase brand awareness

7. Increase potential earnings

8. Generate buzz and media attentions

9. Attract new talents

10. Broaden the product life span

4 Major Strategies for Expanding a Product Line

A company that can successfully expand its product line normally is able to do so because it develops and sells additional products related to its flagship product or products. It must determine what types of products it can add to its product line to strengthen the overall line. While a company can expand its product line in many ways, there are four strategies a company should consider when expanding its product line:

1. Mine your customer feedback

2. Listen to your employees

3. Learn from competitors

4. Innovate from scratch - Invest in research and development

1. Mine your customer feedback

Listening and actively pursuing customer feedback is a good way to do this. Often, customers tell a company what they want to buy. Rather than building a product and hoping it sells, a company should go to its existing customers and ask what else they want in addition to the existing products.

2. Listen to your employees

Don't overlook those who are closest to serving and supporting the customer. They hear and see it all.

3. Learn from competitors

Watching competitors in the industry is another way to gain ideas for new products. If the company has a successful product and a competitor comes out with a new but related product, it could benefit the business to expand its product line to include a similar product to its competitor.

4. Innovate from scratch -- Invest in research and development

A company should always be investing in research and development to introduce new products when needed. In fact, a company can look to innovation beyond its standard industry to gain greater insight into what another successful product might be.

"Start where you are. Use what you have. Do what you can." ~ Arthur Ashe

References:

#ProductDevelopment #NewProductLaunch #ProductLifeCycle #ProductDesign #NewProductDevelopment #NPD #ProductManagement #BrandStrategy #MarketingStrategy #GrowthStrategies #BusinessGrowth

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