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4.5 - Product - Coggle Diagram
4.5 - Product
Extension strategies - lengthening product's life cycle + delaying its decline by prolonging sales revenue
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Redesigning = introducing special features / 'limited edition' = adds value, entices more customers to buy it
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Expand to new markets = expand customer base, attract new customers
Brand extension = use existing & successful brand name to launch a new or modified version of the product = prolong life cycle
Product differentiation = make a product stand out again rival businesses = withstand competition, requires marketing support e.g. sales promotion
Product life cycle
high investment level
rising profit (sales revenue increasing, lower unit costs - economies of scale in production)
positive cash flow
lower investment level
high profit (significant market share, peak sales revenue, economies of scale)
steady, highly positive cash flow
very high investment level (marketing & advertising)
little profit (high expenses involved in launch e.g. publicity, promotion)
negative cash flow
very low investment level (no more sales)
low profit (decreasing) (due to new trends, lower customer demands
decreasing positive cash flow
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