Extension Strategies

Question 1

What is an Extension Strategy?

Answer 1

A business’s plan to extend the life of a product that’s approaching decline.

Question 2

If the extension strategy works, what does this mean?

Answer 2

The product will make profit for longer.

Question 3

Firms have to strike a balance between investing money in…

Answer 3

supporting old products and designing new ones.

Question 4

Explain how adding new features may increase demand for the product.

Answer 4

Makes it more useful or appealing to customers.

Question 5

Explain how creating a new packaging design for the product is an Extension strategy.

Answer 5

May make it more eye catching so that customers are more likely to see it and choose it over competitors products. A new image may also attract a new target market.

Question 6

Explain how targeting new markets can be an extension strategy for a business.

Answer 6

Once they find new markets for their products, they can target their promotional material at the new markets.

Question 7

Explain how changing advertisments can be an extension strategy.

Answer 7

Businesses may be able to make more people aware of the product, promote it in a way that makes it more appealing to the original market or to a new market.

Question 8

Explain how lowering price can be an extension strategy.

Answer 8

Businesses can reduce the price of the product, or use special offers or competitions.