For great brands to consolidate and expand the scope of their markets, they adopt diverse strategies. One of the time-tested ideas is Product Line Extension.
Most of my readers may be wondering what product lines have to do with youth motivation? The fact is that it is one of the rudiments of modern marketing that you have to learn as you step out as a young entrepreneur.
There are many things they won’t teach you in your Business School class that you have to learn, reading mentors like me, which invariably serve you well in the rough and tumble world of business. One of these, product development, is what we are dealing with here today.
Every successful producer of goods or services must have a good brand behind their name. A successful brand has an established goodwill and is a winner with its publics. A brand may be local, regional, national or global, depending on its strength and market segment in the open market place. Every great brand must have to be sustained by a loyal patronage to survive in an age when shelf life can be ephemeral and highly unpredictable. Now, market share is so tight, you battle to keep it.
So, for great brands to consolidate and expand the scope of their markets, they adopt diverse strategies. One of the time-tested ideas is PRODUCT LINE EXTENSION. This is the practice of one successful brand using its name to market a new product or service so that the new product could leverage on the goodwill of the mother product or service, to gain an easier market entry through instant brand recognition.
Let’s put it simply: we have SUN Newspapers, which is a successful brand in the print media segment. Then, the owners of the sun titles introduced a sport newspaper and branded it SportingSUN. That’s Product Line Extention. In other words, the SUN Publishing company decided to extend its product line into a daily sport newspaper by using its brand name – SUN – to market it. The clever use of its successful brand to launch this sport newspaper has many advantages.
One, the SUN group could have spent a fortune to market its new sport paper if published under a new name altogether. Promotions budget was saved for other purposes. Point No. 2: SportingSUN became an instant hit like the SUN titles, because of the advantage of product line extension. There is a third advantage: economy of scale. The spreading of production costs on different products on the same stable reduces unit costs of products and enable such products compete better than their rivals in the market place. That’s because large scale production logically reduces unit cost.
Young entrepreneurs who are just stepping into the business world should learn the importance of goodwill in product marketing right from the onset. The shelf life of any product is dependent on the strength of its goodwill with buyers. If consumers trust your product and services because of quality, dependability and strong performance, you are guaranteed a long-lasting success, which invariably extends to other products from your stable.
Many century-old global and local brands own their longevity to consistent quality performance, reliability, and trust. For instance, here in Nigeria, First Bank Plc has been around for more than a century while many of its rivals have disappeared and completely forgotten. Young business people should do their research on successful brands like First Bank, Dangote group, another conglomerate which has used Product Line Extension to maximum advantage. Its founder, Aliko Dangote is smart.
In markets around the country, the ubiquitous presence of the Dangote brands is evident. You see their label on salt, flour, sugar, indomie, cement, etc. This article is all about Products Line Extension; we should never forget the fact that goodwill is at the core of it all.
Remember, if the Daily SUN had been a failure, it wouldn’t have used its name to launch its sport newspaper – SportingSUN. Even, if a company decides to maintain a mono-product presence, its success in the market segment it targets would depend largely on the elements of its brand power. Therefore, put all the best you can into your product and services from the word go, so that your success could be assured. Not only that, if people identify you with quality performance, that image would impact on any new product coming from your stable in the future.
However, if you unfortunately carry the stigma of fake product performance like people say about Chinese products today, it would be difficult to correct it. Rightly or wrongly, and for inexplicable reasons, people in Nigeria identify products made in China as fake. This perception is really bad and I wonder what the Chinese Ambassador to Nigeria is doing to correct it, because Chinese products have an image problem in the country. However, I dare say, many Chinese products are really good. But the fake ones have now created a serious problem for the quality ones.
Product Line Extension can inflict a heavy damage on other sister products if just one of the brands goes bad, or owing to poor quality control, gets into the market with production defect. Where this occur, what wise manufacturers do is that, they withdraw such defective products from the market immediately and either replace them or pay compensation for damages. And then, embark on a media blitz to launder the image of the product.
Weekend Spice: “A man without a smiling face must not open a shop” – Chinese proverb.
Ok folks, let’s do it again next Friday. Stay motivated.
Ladi Ayodeji is an Author, Rights Activist. Pastor and Life Coach. He can be reached on 09059243004 (SMS & WhatsApp only)