Extension strategies

• What are extension strategies a part of?

  The product lifecycle
• What are the stages of the product lifecycle?

  Research and development, introduction, growth, maturity, decline
• In which stage do extension strategies usually occur?

  Maturity stage
• What is an extension strategy?

  A method to increase sales in a saturated market
• Why is it more effective to implement extension strategies in the maturity stage?

  Sales are more stable and predictable
• What are the advantages of extension strategies?

  Increase sales, revenue, and profits
• What is a disadvantage of extension strategies?

  High costs associated with implementation
• What is an opportunity cost in the context of extension strategies?

  Cash spent on extension could be used elsewhere
• What is the Boston matrix used for?

  To analyze product portfolio and market position
• What are the types of extension strategies represented by the acronym SPAM?

  • Segmentation: Target new customer segments
  • Price: Adjust pricing strategies
  • Advertising: Increase product awareness
  • Markets: Expand into new geographical markets
• How can segmentation increase sales?

  By targeting new customer demographics
• What is a potential outcome of reducing prices?

  Increased demand for the product
• How does reducing prices relate to market segments?

  It can open access to lower-income segments
• What is a loss leader strategy?

  Pricing below production cost to attract customers
• Why might a company run a promotional campaign?

  To increase awareness and sales of products
• What is the purpose of rebranding or repackaging?

  To change perception and increase sales
• How can entering international markets benefit a business?

  It opens new opportunities for sales and revenue
• What role does e-commerce play in globalization?

  It facilitates entry into new international markets
• What should businesses consider when entering a new market?

  Costs versus potential revenues from that market
• Why is it important to consider exchange rates when entering international markets?

  They can affect pricing and profitability
• What is the significance of combining extension strategies?

  They can enhance effectiveness and results
• How can a company target new segments for an old product?

  By using advertising and rebranding strategies
• What should be evaluated when arguing for extension strategies?

  Sales and revenues versus costs of implementation
• What are some potential high-cost markets to enter?

  China, India, Brazil, and Russia
• What is the ultimate goal of extension strategies?

  To increase sales and profitability