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The Right Way to Expand Your Product Line

Thursday, June 02, 2016   By Mike Reddy

 



Expanding your products and services can make or break your business. There is an art to expanding. How much is too much? How little is too little? There is a method to the madness.

You can find the right balance and your business will be the better for it.

The best way to understand your customers is to look around the grocer. In the 1980s, Howard Moskowitz made a name for himself by introducing the food industry to horizontal segmentation.

The truth about the food industry is that people have different tastes. Howard observed that in most cases, people don’t know what they want.

Howard is famous for his work with Campbell Soup and their line of Prego spaghetti sauces. At the time, Prego was a fledgling brand.

Howard realised through his research that people preferred various types of spaghetti sauces. Prego took his advice and introduced an “extra chunky” line of sauces which sold over $600 million globally.

Howard was also known for his work with soft drink companies. When soft drink companies began looking for the “perfect blend” he convinced them to look for perfect blends.

As a result, you began to see hundreds of varieties of Pepsi and Coca-cola worldwide. There was no exact formula that brought consumer satisfaction. Instead, they introduced fruit flavoured colas, diet colas, and every other variety we see today.

When looking to expand your own product line, you may be apprehensive. You are asking yourself the wrong questions - like every business owner in history.

Instead of asking how you can improve your product or perfect the new formula, look for the various alternatives that customers are already using.

Ask your customers how they are using your product. How are they changing it? How are they using it in their daily lives? How can you adapt your product to meet those demands?

Don’t bother going into a new market altogether. A few minor changes can help you expand horizontally in a market you’re already in.

When you do that, you’ll increase your current market share and grow customer loyalty.


Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.