extension strategies

Question 1

What are the extension strategies mentioned?

Answer 1

Advertising, Price changes, Adding value, New markets, New packaging

Question 2

What is the purpose of advertising in extension strategies?

Answer 2

Reminds customers of the benefits of the product in the hope that they will buy it again

Question 3

How does advertising draw attention to a product?

Answer 3

Draws attention to the ‘value’ a product or service has compared to similar products/services

Question 4

What is a potential benefit of consistent advertising?

Answer 4

Builds brand loyalty – people like to buy what they think everyone else is buying

Question 5

What is a drawback of effective advertising?

Answer 5

Very expensive to do effectively

Question 6

What is a limitation of advertising in terms of customer interaction?

Answer 6

Does not allow communication between customers and business and lacks flexibility

Question 7

What is a common criticism of advertising?

Answer 7

Very impersonal - ignored by many customers

Question 8

What is the cheapest way to extend a product’s life?

Answer 8

Price changes

Question 9

How can price changes be linked to boost sales?

Answer 9

Can be linked to a price change to further boost sales

Question 10

When can price changes be effectively utilized?

Answer 10

Easily linked to seasonal events (e.g., Easter, Christmas, Summer holidays)

Question 11

What is a limitation of sales boosts from price changes?

Answer 11

Sales boost can be short-lived – especially if linked to special events such as Easter / Films

Question 12

For which products are price changes particularly relevant?

Answer 12

Only relevant for ‘off the shelf’ products that have customer-facing packaging

Question 13

What is one benefit of entering new markets?

Answer 13

Potential for rapid sales growth in new countries

Question 14

How can new ranges benefit from existing routes to market?

Answer 14

New ranges can benefit from the existing routes to market, making it easy to launch new products

Question 15

What is a significant cost of setting up in a new country?

Answer 15

Very expensive to set up in a new country

Question 16

What does the success of entering new markets depend on?

Answer 16

Depends very much on the brand and its association with a target market

Question 17

What is the effect of adding new features to a product?

Answer 17

Allows a price increase and can increase revenue

Question 18

For which type of brands does adding new features work well?

Answer 18

Works well for popular, well-known brands who have loyal ‘brand’ customers

Question 19

What are the benefits of differentiation through new features?

Answer 19

Can make the product/service stand out from competitors and attract new customers

Question 20

What is a notable drawback of adding new features?

Answer 20

Very expensive – researching, making a pilot, doing trials, marketing

Question 21

What can happen if the change from adding features is not popular?

Answer 21

May reduce demand if the change is not popular

Question 22

When can adding new features be ineffective?

Answer 22

Ineffective if the original product/service is obsolete due to external factors

Question 23

What is the minimum cost involved in adding new features?

Answer 23

Minimum cost to the business involved in this strategy

Question 24

What market segment might a product move into by adding new features?

Answer 24

May move the product/service into the ‘luxury’ market and increase revenue

Question 25

What might happen to sales if customers switch to cheaper brands?

Answer 25

Sales may fall as customers switch to cheaper brands, unless quality also improves

Question 26

What perception might damage sales when features are added?

Answer 26

May damage sales if customers perceive the change to indicate low quality