According to the theory of the product life cycle (see Figure 1), the sales and profits of all products follow a similar pattern over time, no matter how iconic or enduring their image may seem. This life cycle starts with the development stage, leading to introduction and growth within the market, assuming the product is successful. However, at some point, sales growth will begin to slow down, as more and more customers have already made their purchases and the competition intensifies.
At this point, a firm must decide whether to deploy an extension strategy, which can take on a range of forms. It may simply involve making minor changes to the price of a product, or it can include new promotional tactics, for example, the addition of television and radio personality Fearne Cotton, to the Walkers’ campaign. Alternatively, extension strategies can involve more significant product modifications in an attempt to retain consumer interest.
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