How can companies that have achieved success with one product or one line of products continue to grow? Business strategists indicate that three methods are commonly used.
One method is to introduce a new version of an existing product. Imagine, for example, a beverage company that has been making a particular soft drink for a hundred years: the soft drink is the company's most recognizable product, and it produces the associations and expectations that consumers have about the company itself. However, the soft drink is not popular with younger consumers because they have different expectations about how a good soft drink should taste. So the beverage company makes small changes in its ingredients and advertises the resulting product as the newest version of an old favourite. Of course, the company also still sells the old version of the soft drink for those who want it.
In another method, a well-known company capitalizes on its good name by selling a new but related type of product. For example, a manufacturer famous for making tough, long-lasting construction vehicles like tractors and bulldozers may introduce a line of work shoes or boots for construction workers.
In the third method, two or more companies form a partnership to make and sell a new product under a name that indicates that the product was made by both companies. For example, a company that makes chocolate may partner with a company that makes ice cream to create a new product, a chocolate-coated ice cream bar. Consumers who have already tried and enjoyed the ice cream by one company but have never tried the chocolate by the other are now exposed to the chocolate company's product, and they may be more likely in the future to buy products made by the chocolate company based on this good experience with the combination product.