Companies will try to extend the length of the maturity stage Product Life Cycle (PLC) to delay unavoidable decline and ultimate death of a product. That is why every Marketing Department in any business organization needs to consider extension strategies.
What are extension strategies?
Extension strategies are means of lengthening the life of a product to delay its decline. They are attempts by marketers to lengthen Product Life Cycle (PLC) of a particular product.
Specifically, extension strategies are marketing activities used typically during the maturity stage and the saturation stage of a product’s life cycle.
Prolonging these two stages of the life cycle of a product has several benefits.
Benefits of using extension strategies
As extension strategies are mainly aimed at rejuvenating a product to extend its life, successful extension strategies will increase sales of the product again.
The maturity stage and saturation stage are the most profitable stages of Product Life Cycle (PLC). Hence, when sales are successfully prolonged, it means that the company will continue selling the product at the highest profitability.
That is why a business will want to keep the product in these stages for as long as possible to make the most of the profits from the particular product.
A business must try to extend the life of a matured and saturated product before sales start to decline. Sales forecasts will be able to help to predict the falling sales before it happens as the market starts demanding a completely new product.
Examples of common extension strategies
Attempts to extend the life of a product can be carried out using various techniques. Examples of common extension strategies include:
- Finding new markets for the product. Business managers will explore the opportunity of selling the product in new markets. For instance, trying to sell the product in new shops, in different cities, regions or even abroad. Selling overseas will require the firm to enter into foreign markets.
- Finding new uses for the product. The marketing department will look to see whether the product can be used for something different than what it was originally intended for. The company can also re-launch the product as serving a completely different purpose.
- Redesigning the product. This refers to product design specifically – physical appearance of the product and the process of adding value to the product. Firstly, by giving the product a new name, new colors, new sizes, new shapes, new interior, etc. Secondly, by introducing new special features that did not exist previously such as faster operating speed, higher quality of components, etc. which add value to the product to entice more customers to buy it. Redesigning the product may also include launching ‘limited editions’ of a current product such as golden iPhones.
- Repackaging. This involves changing appearance of the packaging of a product. The main aim is to improve appeal of the product to consumers. Adapting the packaging can be done by using more enticing colors or attractive materials. As repackaging can give the product a new image which appears more fresh and up-to-date, this may have a large effect on customer demand.
- Increased promotion. This mainly includes intensifying advertising efforts and other promotional activities to promote the product more frequently. The marketing department will look at different ways of promoting the product to either appeal to a new market or the current market. Heavy promotion of the product can also revitalize its image by changing the promotion message.
- Price reductions. Price reductions can help to increase demand for a product fast. This will be especially appealing to those customers who were not able to afford the product before. Additionally, current customers can buy more of the product or buy it more frequently. Price reductions can be achieved either as a consequence of benefiting from economies of scale or at the expense of profit margins. A hidden benefit of price cuts is getting rid of excessive inventory before stocks become obsolete.
- New accessories. To prolong the life cycle of a product, the firm can design and launch a range of accessories. Those accessories can be either permanently incorporated into the product or used externally when necessary. For example, Apple introduced a range of accessories to its products such as headphones, protective cases, chargers, keyboards, mouse, etc.
- Brand extension. Brand extension, also called brand stretching, means using an established brand name, or trademark, to launch new products in a different product line. Using of an existing and successful brand name will increase sales, hence prolong the life cycle.
- Launching complementary products. This includes developing a wider range of new products that can be used together with the original product. Introducing closely related products to complement the original product can encourage people to use the product more, or use it in a different way. New complementary products can help customers to use the product more efficiently (e.g. higher-quality gasoline for cars) or find new uses of the product (e.g. tow hooks for cars enable pulling trailers).
Now, you are ready to show awareness of various extension strategies. Remember that the most common extension strategies involve changes in the product itself, the product packaging, the way the product is promoted or any changes in the channel of distribution used.
