Extension Strategies

Businesses will attempt to use extension strategies to prevent their product from going into decline. They will have to spend money in research and development to try and retain periods of growth and maturity for as long as possible in order to maximise sales. There are various strategies that businesses can employ:

• Finding new uses for the product, for example the basic technology in hot air strippers is no different from that of a hairdryer;
• Targeting new market segments with the existing product, for example sports clothes manufacturers now advertise their products as 'street wear' rather than just sports wear in the hope of achieving more sales;
• Marketing a product as as a new brand with a different use, for example Lucozade was originally sold as a product to assist those recovering from illness, by selling it as a sports drink a huge increase in sales has been achieved;
• Making minor cosmetic changes to the product, for example, Manchester United frequently make small changes to their kit in the hope of increasing their replica shirt sales.

The effect of extension strategies can be shown on the diagram below.

Decline is inevitable in certain markets as new technology makes existing products out of date. This means that a business will have to spend money on research and development to ensure that they have other products to sell when demand for the current product goes into decline.