Assess your options for business growth

Product development strategy relies on developing new products or modifying existing products so they appear new, and offering those products to current or new markets. When executed successfully, it can lead to growth in sales and market share.

Use this strategy when you've maximised growth in your current market with existing products.

Growth through product development

With product development, a business usually has one of three choices. You can:

• create an entirely new product
• evolve your existing product for its existing market
• enhance your existing product to introduce it to new markets

Steps include detailed research and development, assessing customer needs, product or service design and analysis, prototyping and production.

Each company approaches product development differently. You can outsource development, buy in other products to rebrand under your name, or partner with others. Focus on the new product development process with ongoing customer research for the best results.

Brand extension strategies

Brand extension, or brand stretching, is a useful tactic in product development. It involves using your established brand name for a new product or new product category.

You can extend your brand in many ways, including:

• offering the original product in a new form
• combining two well-known products into one
• applying the existing brand to a different product category
• creating complementary products

Brand extension leverages your reputation and cuts costs compared to fully new launches. However, to work, the brand extension must provide a logical link between the original product and the new item. If there is a mismatch, or the new product creates a negative association, this can lead to brand dilution. Find tips on using and managing your brand.

Keep in mind that product development is only one of four key business growth strategies. Others include market penetration, market development and diversification.