The Marketing Mix: Product Product Life Cycle – Extension Strategies Today you will know how the product life cycle can be extended You will understand the strategies businesses use to extend the life of products You will be able to apply this theory and understanding to real products
Extension Strategies A firm may try to prevent sales from going into decline by using extension strategies. Examples include: Increasing the use of the product Encouraging the use of the product on more occasions Reducing the price Adapting the product - extra ingredients, new improved flavour etc Introducing promotional offers - e.g. competitions New advertising campaigns Changing the image of the product through promotion methods and branding - e.g. vodka now appeals to a younger audience
Extension Strategies: Product Life Cycles Sales Time Effects of Extension Strategies Other options: Terminate production OR Continue to let the product sales decline
Examples of Extension Strategies: Ford re-launched its KA with different features, to target new customers, and increase sales. Kellogg’s in their adverts suggest eating cereal at any time in the day not just the traditional breakfast time. This encourages consumers to increase their use of the product and hopefully increasing sales. Johnson’s baby shampoo increased the length of its life cycle by targeting adults to use the product as well as babies therefore opening up new markets. Smarties recently released their new packaging and have ditched the cylindrical design and replaced it with a hexagonal pack.
Student Activity In pairs provide an example of a way in which each of these products has used an extension strategy in it life cycle and think of an extension strategy you feel it could use to increase sales: Sony Ericsson Mobile phones Walkers Crisps GHD hair straightners McDonald Happy Meals Once complete discuss your extension strategies with the group next to you. Make a judgement on which extension strategy you feel is the best and why. Write this up.
The Product Life Cycle: McDonalds Activity McDonalds has used extension strategies on its Happy Meal products by providing healthy alternative options to carbonated drinks and Fries. Based on your knowledge of McDonalds and the product lifecycle complete the two questions below: Analyse two factors you believe have influenced McDonalds decision to change their Happy Meal product. (6 marks) Evaluate the success of this new strategy. (10 marks) Here you need to explain both sides of the argument and then make a judgement based on which factors you consider the most important.
What extension strategy has each of these products used? Increased usage Additional features New uses and aiming at different market segments Product modification New market segments
Starter Activity: Product Life Cycle Activity Draw a basic product life cycle for each of the following types of products… a) flop product b) a product with seasonal sales c) a product that has used multiple extensions d) a product that has had a long life with high sales e) a fad product that has had a short life