Extension strategies

Extension strategies are actions a business takes to keep a product selling for longer, delaying or reducing the fall in sales once demand begins to drop.

They are used when a product is becoming less popular, or when a business wants to keep an existing product earning money before a replacement is ready. Common extension strategies include:

• changing product features, such as adding a useful new function
• updating the design or packaging so the product looks fresher
• finding new uses for the product
• targeting new customer groups or selling in new markets
• rebranding or relaunching the product with a new image
• renewed promotion to remind customers about it or attract new ones

For example, a business selling the Luma desk lamp finds sales slowing because many households already own one. It adds a dimmable setting and a clip for bunk beds, targets university students moving into halls, and refreshes the packaging. These changes could keep sales and revenue coming in for longer, and give the business more time to develop a replacement product.

Extension strategies do add cost, though: design work, new packaging and promotion all have to be paid for. They may also fail if demand has fallen permanently. If built-in lighting or phone torches mean most customers no longer want a separate desk lamp, spending more on the Luma is unlikely to create lasting demand. The business may then need to accept the fall in sales and focus on a new product instead.