| The first question an entrepreneur should ask himself | | | | the products range is a pretty difficult task: what |
| when contemplating whether to extend his product | | | | products can you offer to people who are already |
| range is "why would I do that?" | | | | buying? |
| A good share of the entrepreneurs I know have a | | | | When adding new products to the business, focus |
| tendency to extend their product range in a very | | | | become the crucial aspect, and not the number of |
| curious, oportunistic way. Whenever the market has | | | | products being launched. If several new products are |
| more opportunities than suppliers, I see entrepreneurs | | | | to be added to the range, they should be positioned |
| deciding "Let's do this, too. We can do this, why not | | | | for different targets and must be taken care by |
| doing it?" | | | | different teams. You can't give the market two |
| For this reason, they end up developing unrelated | | | | products at one and you can't have one single team in |
| products that eventually lead to parallel businesses, | | | | charge of launching two products. Multiple products |
| very time and effort-consuming for the small business. | | | | should be launched simultaneously only if the target |
| An entrepreneur should first be able to address the | | | | market is large enough and there's an equally large |
| following two questions: | | | | team to manage it. |
| - why does he feel the need to take such step, | | | | Two frequent mistakes made by small biz |
| launching a new product or service? | | | | entrepreneurs are lack of innovation and focus. More |
| - will the product contribute towards a better strategic | | | | exactly, they might launch products that are too "down |
| positioning of the company? | | | | to earth" (read: "boring") for an expanding market, or |
| - will the product help sustain the company's message | | | | products that don't comply with the overall business |
| for the target market? | | | | strategy and direction. If the launch of a new product |
| Some other issues should be considered and | | | | was successfull, sales should get a boost, but if the |
| answered too, before deciding to add a product to the | | | | launch failed withdrawing the product is probably the |
| company's range: | | | | best option. A frequent syndrome when it comes of |
| - will the new product cannibalize the existing | | | | small businesses stretegy is that of buried costs: the |
| products? | | | | entrepreneur insists on keeping a failed product thinking |
| - if a new product is launched, will customers still | | | | "something" can be done with it or else the money |
| purchase the previous products? | | | | spent on development and launch are lost. |
| - the new product's market is a new one, or is it the | | | | If the new product was a failure, it is theoretically |
| same market as for the older products (is the business | | | | possible to try a re-launch, a re-branding or a different |
| truly extending, or it is just being updated?). A business | | | | communication campaign; though, most of the times it's |
| update is surely not a bad idea, but not if it comes as | | | | simply the wiser to just eliminate the product and cut |
| an unexpected result: the entrepreneur invests to | | | | the possible further losses. |
| extend the business and in return he only succeeds to | | | | To conclude, here are some major question a small |
| replace older products with new ones. | | | | business entrepreneur should ask himself before |
| Extending a product range should occur only when the | | | | launching a new product: |
| target market is ready to buy something new. This is | | | | - will the product contribute towards a better strategic |
| especially true on emerging markets, growing markets | | | | positioning of the company? |
| that need time to assimilate and learn new products, | | | | - will the product help sustain the company's message |
| according to existing needs. If a product is launched | | | | for the target market? |
| too early in the market's development stage, one | | | | - will the new product cannibalize the existing |
| should brace himself for failure, or at least for a costly | | | | products? |
| adventure: marketing the new product can require | | | | - if a new product is launched, will customers still |
| more time and money than planned and expected. | | | | purchase the previous products? |
| Extending the products range for a small business is | | | | - the new product's market is a new one, or is it the |
| actually a matter of inspiration rather than perspiration | | | | same market as for the older products (is the business |
| (read: "research") since market research is often too | | | | truly extending, or it is just being updated?). |
| costly for the small biz entrepreneur - thus extending | | | | |