Product line expansion is an amazing way to stay ahead in your niche and industry.
Product line expansion is a strategy adopted by many powerful companies. For example, Coca-Cola Company started with one product, but it has gone ahead to expand into more than 500 brands worldwide, including Fanta, Sprite, 5 Alive, etc. On the other hand, Microsoft Corporation which started with Microsoft Word has expanded into Xbox, Excel, Explorer and so on.
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Therefore, it is expected that any company that wants to remain relevant, must ensure to diversify or expand its product line. Whether as a product provider or service provider, product expansion is very important for
business growth and development. For example, you might be a cake baker, you can choose to expand your product line by making biscuits and cookies.
In this article, we shall look at the top five reasons why you should expand your product line.
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To Boost Your Market Share
One of the reasons why you should expand your product line is to access a larger audience and cover a greater size of the market. You can use product expansion to consolidate previous products and lay a stronghold on your current market. Expanding your product line will help you advance old products and your business in general to reach a new audience.
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To Increase Your Customer Loyalty
When you expand your product line, it increases customer loyalty as they encounter new products and varieties from the old. It gives them a fresh opportunity to engage with your brand anew. It’s also a way of retaining old customers and keeping them excited. You can also use it to test your customer loyalty, rather than diving into a new and unknown territory, you can use product expansion to consolidate on old markets.
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To Minimise Risk
Companies introduce new products to minimise the risk effect of declining old products. Wiser companies often use new products or expand product lines as a means of rebranding and revamping their economic fortunes. Furthermore, business expansion is a way to ameliorate risks associated with changes in trends. There are cases where old products might be facing decline, which can be detrimental to the company. Thus, a company can choose to introduce a new product to mitigate risk.
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To Improve Visibility And Credibility
Product expansion is another way to improve visibility (that is, to be seen by a larger audience or existing audience) and credibility (that is, to state your expertise, professionalism and your ability to remain valuable in the marketplace). Including another product in your product line is another opportunity to offer your customers another quality product, hence, boosting your reputation in the marketplace.
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To Create A Complementary Product
Finally, another reason to expand your product line is to create a complementary product for the old product, which can as well improve the well-being of your customers. A complementary good is a product or service that adds value to another. In other words, they are two goods that the consumer uses together. For example, a cereal company might choose to expand its production line by producing milk.
Featured Image Source: Beverage Industry
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This article was first published on 10th November 2021
nnaemeka-emmanuel
Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.
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