Product Expansion / Product Modification

 Companies may decide to alter their current products or replace older products with new versions.  When using a product expansion strategy companies will keep the original on the market and add other varieties. ◦ Examples:  Gatorade adding Glacier Cherry, they keep the original lemon lime, orange, and fruit punch

 When using a product modification strategy companies will replace the original with a new version of the product. ◦ Examples: Think cars!!! Out with the old and in with the new  Companies will reveal the new 2016 car and no longer product the 2015 line.

 The new product is intended to be a different product that appeals to somewhat different needs of consumers  Easy to market because customers are already familiar with the original product

 Company wants to provide a wider range of choice to increase product depth within a line  Adds another option for consumers

 An alteration in a company’s existing product.  Modified products may be offered in new and different varieties, formulations, colors, styles, features, or sizes.

 When modifying a product the old product is phased out  Think cars! When the new models are released the companies no longer produce the older model

 Flip the paper over and look at the chart.  You will now come up with some ideas of your own.  The example is a little dated but still a good one. Before cell phones the new gadget was a PDA device. Think about it as an iPhone with no internet connectivity or cell phone access, that’s right no texting either. The PDA could hold someone’s calendar and important documents on one device.

 The example for product expansion discusses a very familiar problem, lack of memory or power!  By offering another model with extended battery life or extra storage space would give consumers another option  For product modification they would improve the original by, get this, adding a built in cell phone. Obviously, this was a good idea

 Now it is your turn, on the next slide there is a list of 4 products. You need to develop ideas for Product Expansion and Product Modification for each example.  Keep in mind: ◦ Expansion keeps the original ◦ Modification gets rid of the original Check the internet to make sure you are coming up with a new idea! Don’t write down an idea that already exists. ◦ Good luck!

ProductProduct ExpansionProduct Modification Palm Tungsten personal digital assistant (PDA) Add another type of PDA with more power and memory Create a PDA with a built-in cell phone iPhone Beats by Dre M&Ms Doritos (select your own product here)