Product Life Cycle - Extension Strategies

The Product Life Cycle diagram displays a product going through the process of development, introduction, growth, maturity (sometimes saturation) and finally decline.

But remember the products that are still with us? How do they do it?

They renew themselves in one way or another.

The best way to answer a question like this is to think about changing or modifying each of the 4Ps of the Marketing Mix: Product, Price, Place and Promotion.

Changing or modifying the product could result in a change of shape or colour or indeed new additional and improved features, for example wireless broadband.

Altering packaging can transform the perception of a product. It may introduce brighter, more child friendly colours or eco-friendly packaging to appeal to a different market segment.

Changing where a product is sold can extend its life. Making products available online increases the customer base considerably. Also remember the Brother Typewriters. They were made obsolete in the West by the Word Processor, then the PC and now the laptop. But they still sell in the Third World where electricity is still not available to everyone.

Changing prices either up or down can extend the product, though in most cases it would be lowering price to allow it to be more affordable to more customers.

Changing the way a product is advertised/promoted can extend its life. Using sales promotions and BOGOF attracts more customers who are perhaps looking for savings.

Competitive Pricing Strategies

There are three main types of competitive pricing that is used in businesses at present.

Low Price
This is when a firm charges a lower price than the competition.
It is used to create interest and awareness. This in turn will boost sales.
It works best when customers are not very loyal to any particular brand and in markets that are price sensitive (meaning that they are highly responsive to changes in price)
It is often used in highly competitive markets, not a good idea to be used in markets with one or two main competitors.


Penetration Pricing
This is used when entering a new market and is set very low, sometimes at a loss.
This can generate high sales and a large market share very quickly.
Once the firm is established, the price may well go back up.

Destroyer Pricing or Predatory Pricing
This is used normally in existing and highly competitive markets. It is actually illegal as it is deliberately used to eliminate competitors.
Large firms often do this to get rid of small or medium sized competitors. Large firms can take losses for longer and once the small firm has went bust, they can absorb their customers and revenue.
Markets that have firms using destroyer pricing are often seen as high risk and may put off new entrants to the market.