What Extension Strategies Can a Business Use?

A business can use extension strategies to keep a product selling for longer, usually when sales have levelled off in the maturity stage of its product life cycle. Common strategies include changing the product, finding new customers, increasing promotion and adjusting the price.

Common strategies

• Modify the product: Add features, improve quality or update its design. A phone manufacturer might release a version with a better camera to give customers a reason to buy.
• Change the packaging: A new look can help a product stand out or appeal to a different group of customers. Packaging alone is less likely to work if the product no longer meets their needs.
• Target a new market: Sell to a different customer group or in a new geographical area. This can generate sales without replacing the product.
• Increase promotion: Advertising or a promotional campaign can remind customers about the product, highlight a new use or attract people who have not tried it.
• Adjust the price: A lower price might encourage more purchases, although it could reduce the profit made on each sale.

For example, a drinks business whose sales have stopped growing might introduce a new flavour, promote it to younger customers and sell it through additional retailers. These actions aim to increase demand and delay a fall in sales.

Exam mistake to avoid: An extension strategy is not guaranteed to increase sales or profit. Explain why the chosen strategy might work for that business, then consider its cost or drawback. A new flavour, for instance, may attract buyers, but developing and promoting it costs money. The best choice depends on the product, its customers and the reason sales have slowed.