Product Line Expansion: What Is It And Why Does It Work?

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Updated: April 26th, 2024

What Is Product Line Expansion?

Product line expansion simply refers to a way of focusing on your customer's requirements and offering them variants of the current products that they already love.

Before undertaking the product line expansion strategy, consider listening to customers' feedback. Focus on understanding their current pain points and look at ways to make your products appeal to a broader market.

It's important to note that adding new products and diversifying may not be in the cards for you right this moment, and that's okay. You can always consider it down the road.

Product Line Expansion Key Takeaways

Product line expansion does not necessarily mean you will keep the same customers. You could introduce a brand new product targeting a brand new audience.
When expanding the product line, it is imperative to focus on product quality. Sacrificing any of the quality of your product in order to expand, sets your brand for failure in the long term.
Before choosing the product expansion strategy, research and understand the upcoming trends. Remember, some trends fade quicker than others. It's important to find and create a sustainable solution for your audience.

Understanding Product Line Expansion

After small business gains traction in the market place, the business owner can take advantage of brand strength by pursuing product line expansion.

Product expansion strategy may include the vertical or the horizontal products to your original:

Vertical product line expansion features creating new variations of your original product.

Thus, you could add new colors or materials to the existing product.

Horizontal product line expansion entails the introduction of complementary products.

Therefore, horizontal product expansion allows the company to make more products targeting the current or new customer base.

Although both product expansion strategies are viable, each method depends entirely upon your business goals and resources.

Real World Examples of Product Line Expansion

1. Uber

Uber Technologies Inc was founded in San Francisco in March 2009 as a ridesharing app.

Twelve years later; the company is active in over 900 cities, with millions of users relying on the ridesharing app. To ensure customer satisfaction, Uber provides a wide range of ride preferences.

Thus, a customer can enjoy a personalized comfort level by selecting from the wide range of options available on Uber.

For Uber, changing how people can request rides from point A to Point B was just the beginning.

Today, customers can request food delivery service through Uber Eats, while the company is also committed to improving public transport for all, as well as provision of health care to those who need it.

2. Coca-Cola

Coca Cola is another example of a company that has practiced product line extension.

Over the past century, the soft drink company has introduced variations of its coke soda. These variations range from packaging to flavor.

Coca cola`s product extension strategy has made sure that customers can enjoy their favorite drink regardless of the preferred flavor or packaging.

How to Get Started with Product Line Expansion

To ensure a successful product line expansion, follow these tips:

Listen to your customers for ideas on improving your existing offerings and suggestions for completely new products or services
Look at ways your product or services could appeal to a broader market and look at what you can offer new markets
Get the inside scoop on what is happening in your industry to see where the market is headed
Expand your product distribution channels to attract more customers and appeal to new markets
Having a scalable infrastructure and foundation is crucial when expanding the product vision

Diversify your Product

Adding new products to your business is a great way to expand into new markets and grow your business:

It's important to note that adding new products and diversifying may not be in the cards for you right this moment, and that's okay. You can always consider it down the road.

Here are some reasons you may want to considering adding/diversifying your product

Meeting the needs of your customers
Establish yourself as a top provider in your industry and stay ahead of the game with competition
Resistance to downturns/trends fading
Create new revenue streams

One great example is when Michele Morton, founder of Maxbit created a successful product and decided she wanted to experiment with two new products

Case Study

This female-run company has grown from the first year to this third year in over $200,000 in sales and added two new products this year. All this from an idea because I kept saying, “There must be a better way!!”

We have expanded into Hammacher Schlemmer through The Grommet and more up and coming platforms for next year that will lead to exciting growth.

We love our local mom and pop stores and you will find The MaxBit Display scattered all over the US in stores. ACE Hardware picked The MaxBit for its National show in 2018 and several ACE stores throughout the US now carry the product line. In addition Forestry Suppliers, and A M Leonard customers keep coming back for more.

We expanded internationally into Canada and Australia. We are pleased to see people all over the planet enjoying digging in the dirt with The MaxBit. We launched two new products, The MaxBit 1 Gallon and 3 Gallon digger that is powered by a one-man auger. It is a big hit in Canada and making its way into the US markets.

As we have grown we have looked at options for growth and decided to pursue companies that would be interested in licensing The MaxBit product line. With more inventions in the back pocket, we need the freedom to explore and help with a company to expand. I think for some companies this is the threshold point. How do I manage the growth, do I want to manage it, grow with it, or give someone else the opportunity - responsibility?

how-maxbit-grown-over-200k-in-sales-and-added-two-new-products-this-year

Michele Morton, on starting THE MAXBIT ($1,000/month) full story ➜

meet the author

Pat Walls

I'm Pat Walls and I created Starter Story - a website dedicated to helping people start businesses. We interview entrepreneurs from around the world about how they started and grew their businesses.

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