The Art of Balancing New Products with Existing Offerings

Diversification into new products, or expanding existing product categories, is a crucial strategy for dealers who want to attract new customers while maintaining the loyalty of their current clients

By broadening the scope of offerings, businesses can tap into different market segments, ensuring they meet the needs and preferences of a wider range of consumers. There are several drivers behind the decision to diversify product ranges. These can include shifts in social trends, the decline of existing products, or simply a desire to avoid being pigeonholed as catering to a narrow demographic.

However, successful diversification doesn’t just happen by adding a new product to the mix. It requires thoughtful consideration and strategic planning. Dealers need to ask critical questions such as: Who is the new product aimed at? Is it designed to appeal to existing customers, or is it aimed at attracting a completely new demographic? By carefully evaluating the rationale behind diversification and positioning new products thoughtfully, dealers can create a compelling product mix that resonates with both existing and new customers.

Who Wants It?

Having a new product is great, and naturally, you want your customers to share in that enthusiasm. However, just because a product is new and appealing doesn’t automatically guarantee success if it’s not reaching the right audience. To convert that excitement into sales, it’s essential to first consider who the product is truly for.

It’s crucial to carefully define the target market for each new offering. This involves asking key questions like: Who will benefit the most from this product? What are their values and purchasing habits? Are there any unmet needs or gaps in the market that this product can fill?

Will it Revitalise the Line?

Over time, even the most popular products can experience a drop in demand. For dealers, staying ahead of trends and identifying shifts in customer preferences is crucial. However, it’s just as important to recognise when a product’s decline in popularity is a temporary lull versus when it signals the natural end of its lifecycle. Understanding this distinction can help dealers make informed decisions about product diversification and strategy.

For example, if a certain product has seen a decline in sales, it may be tempting to introduce something entirely new in response to a perceived shift in market demand. However, in some situations, a better strategy might be to identify smaller adjustments – such as offering complementary items, bundles, or product upgrades – that align with customer needs.

This approach not only helps maintain continuity with existing customers but also reduces the risks associated with introducing entirely new products. Supplementing the original offering with relevant additions can improve the product’s appeal and reignite interest.

Considering Positioning

When adding new products, it’s crucial for dealers to consider how this will impact the sales and perception of existing products. Introducing a new product can shift customer focus, and without careful planning, it may unintentionally overshadow or confuse the positioning of your current offerings. In many cases, adjustments to product packaging, branding, or design may be necessary to maintain clarity and drive continued interest in the entire product range.

For example, when launching a new line of printer cartridges. While this may be an exciting opportunity to expand your offerings, the new products could lead to confusion about compatibility with existing products, particularly if they are similar but not interchangeable. In this case, it might be important to update the packaging and branding of your current products to clearly communicate which cartridges are compatible with different printer models.

Adjusting packaging and branding ensures that all products within your range complement each other and communicate clearly with your customers. It also helps prevent market confusion, reduces the risk of lost sales and maintains a cohesive brand experience.

Successful product diversification requires a strategic approach, careful market evaluation and thoughtful adjustments to ensure that both new and existing products complement each other. By understanding who the new products are for, revitalising existing lines and making necessary updates to packaging and branding, dealers can create a compelling and cohesive product range that resonates with a wider customer base.