What Ice Cream Sundaes and Starbucks’ Via Have in Common

How to Extend Your Product Offering

Nothing beats an ice cream sundae for a treat on one of the dog days of summer. Created to get around blue laws forbidding the consumption of fizzy drinks on Sundays, ice cream sundaes were a soda-less ice cream soda. Further, the name was modified to quell concerns about using the name of the Sabbath. Over time, sundae options have continued to proliferate. From a marketing perspective, the ice cream sundae shows how one proprietor’s changed his product offering to meet his customers’ desires within the constraints imposed by local government.

Like the proprietor with his calorie-laden treat, Starbucks sought to extend their offering to meet their market’s needs and/or constraints when they introduced Via, an instant coffee. This may be difficult to believe of Starbucks, the company that transformed Americans’ take-away cup of joe from something bought at a local deli or 7/11 to a daily luxury, but they knew what they were doing.

When Starbucks first extended their product line to an instant version, many people wondered what they were doing to their brand. Yet, as Via is poised to become a $100 million dollar brand, its creation seems like a no-brainer. Starbucks already had expanded  inline extensions (whole beans, bottled drinks and ice cream), cross sold related food in their retail stores (baked goods, breakfast and sandwiches), entered the hospitality business (hotels, airlines and others), and offered other products (music in terms of CD compilations and refillable cash cards).

5 Areas to examine to extend your product offering

To help you look for your firm’s next ice cream sundae or Via instant coffee, here are five areas where you can look for new product opportunities. As you go through this list, don’t forget to analyze what your competition is doing!

  1. Other product formats. Can your product be offered in different ways that can be used by customers or unserved markets?
  2. Related products. Are there other options that you can give your customers to enhance their experience and/or improve their lives?
  3. Current market’s needs. Are there products that you can offer your customers that you aren’t currently fulfilling?
  4. Unserved segments. Are there markets who can use your product that you’re not serving? How can you reach them? Do your products need to be adapted?
  5. Locations. Are there other places where your product isn’t currently offered? Among the places to consider are physical locations, social media, distributors.

From a practical perspective, it can be useful to use these questions to brainstorming sessions within your organization. These meetings yield the best results when a broad cross section of employees is present because this brings in different perspectives.

3 Product factors to test

Further when developing a new product, you should test its various components in small markets to ensure that consumers accept it. Among the factors to test are:

  1. Product. What new functions and/or needs are you meeting? Does it serve new uses or markets? Is the packaging different?
  2. Price.  How is the product priced compared to your existing offering? How is it priced compared to its near substitutes and/or competitors? How does the price relate to its perceived value to customers?
  3. Promotion. Does the new product leverage your existing advertising and marketing? Can you use your existing products to let potential customers sample it? Have you included a social media component to your marketing?

While not every company can introduce a revenue generating product of Via’s magnitude, but continually thinking about how to expand your offering to serve more of your customers’ needs and extending your products to new audience segments, will increase your bottom line.

Happy marketing,
Heidi Cohen

Photo credit: Heidi Cohen

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