Article originally appeared at LinkedIn here.
Real opportunity to grow revenues and margins may be lurking in your company’s commodity and mature product lines. Evolving these products with smart, tightly-targeted development investments can rejuvenate an existing product line. (Source)
Managing a product, particularly if it currently sits towards the mature or declining end of the product life cycle scale, can present a challenge to even the most savvy executive.
These product managers need to determine if some way may exist to breathe-in new life and new excitement so that new users are attracted and existing users not turned-off.
I remember in 2000 when Heinz experimented with various ketchup colors only to phase it out in 2006 when people found that they didn’t like purple ketchup on their french fries. Traditional red ketchup users weren’t offended but new color users quickly lost interest. No harm, no foul.
But who can forget 1985 when Coca Cola tampered with its recipe rolling out New Coke? It was a PR disaster, infuriated the traditional user base and didn’t really interest new consumers.
Two unique examples of attempts made to reinvent mature cash-cows that didn’t quite go as planned.
On-the-other-hand ,managers also need to determine if a product has lived its useful life due to new and improved technologies or designs, and let said product slip away into oblivion while milking it for profit and cash flow until it does.
Now let’s look at a current day example of the potential reinvention of an extremely successful and mature product as it seeks out a new segment of the market to try and attract.
The manufacturer of the Glock handgun is reaching out to a new customer base!
In an attempt to expand its market to the female segment, Glock is toying with the idea of different gun colors that women may find more appealing than the traditional black.
Will it work, and what if it doesn’t? If this gun is offered in new colors, a gun that’s already sold in 50 countries and the choice of military and law enforcement personnel alike, will it grow market share and boost sales?
Does the company risk negatively impacting sales of its standard black gun because traditionalists are offended by the new offering? Will there be no effect on sales either way and the experiment will eventually be ended?
Only time of course will tell but the company hopefully knows its current user base and is comfortable this trial would have no impact on sales to them. They will also hopefully have done market research and be comfortable with the fact that a market for these handguns of various colors actually exists.
They may be right and they may be wrong but those are the risks you take when you manage a brand! Any brand! _________________________________________
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Written by Michael Haltman, President of Hallmark Abstract Service, New York. HAS is a provider of title insurance in New York State for residential and commercial real estate transactions specializing in the areas of New York City, Long Island and Westchester. Remember that you have the right to choose your own title company (click here to learn more)! If you have any questions you can reach Michael by email at email@example.com.Google+