extension strategies Flashcards
What are the extension strategies mentioned?
Advertising, Price changes, Adding value, New markets, New packaging
What is the purpose of advertising in extension strategies?
Reminds customers of the benefits of the product in the hope that they will buy it again
How does advertising draw attention to a product?
Draws attention to the ‘value’ a product or service has compared to similar products/services
What is a potential benefit of consistent advertising?
Builds brand loyalty – people like to buy what they think everyone else is buying
What is a drawback of effective advertising?
Very expensive to do effectively
What is a limitation of advertising in terms of customer interaction?
Does not allow communication between customers and business and lacks flexibility
What is a common criticism of advertising?
Very impersonal - ignored by many customers
What is the cheapest way to extend a product’s life?
Price changes
How can price changes be linked to boost sales?
Can be linked to a price change to further boost sales
When can price changes be effectively utilized?
Easily linked to seasonal events (e.g., Easter, Christmas, Summer holidays)
What is a limitation of sales boosts from price changes?
Sales boost can be short-lived – especially if linked to special events such as Easter / Films
For which products are price changes particularly relevant?
Only relevant for ‘off the shelf’ products that have customer-facing packaging
What is one benefit of entering new markets?
Potential for rapid sales growth in new countries
How can new ranges benefit from existing routes to market?
New ranges can benefit from the existing routes to market, making it easy to launch new products
What is a significant cost of setting up in a new country?
Very expensive to set up in a new country
What does the success of entering new markets depend on?
Depends very much on the brand and its association with a target market
What is the effect of adding new features to a product?
Allows a price increase and can increase revenue
For which type of brands does adding new features work well?
Works well for popular, well-known brands who have loyal ‘brand’ customers
What are the benefits of differentiation through new features?
Can make the product/service stand out from competitors and attract new customers
What is a notable drawback of adding new features?
Very expensive – researching, making a pilot, doing trials, marketing
What can happen if the change from adding features is not popular?
May reduce demand if the change is not popular
When can adding new features be ineffective?
Ineffective if the original product/service is obsolete due to external factors
What is the minimum cost involved in adding new features?
Minimum cost to the business involved in this strategy
What market segment might a product move into by adding new features?
May move the product/service into the ‘luxury’ market and increase revenue
