Thursday, October 24, 2013

Brand Extensions Deliver
New Software Sales Opportunities

Most new products and services, Philip Kotler believes, come from line extensions or brand extensions. Kotler is the author of "Ten Deadly Marketing Sins - Signs and Solutions," a highly respected university professor, and a successful marketing consultant to Fortune 100 companies.

Line extensions and brand extensions are simple concepts. In cola terms, these phrases mean that a soda company introduces high-sugar, low-sugar, artificial-sugar, and no-sugar cola. We get 12 ounce cans and 24 ounce bottles. We get lemon cola, vanilla cola, and cherry cola.

Kotler tells us that brand extensions simply add to the costs of production, and don't generate significant additional sales. I wonder if Kotler would feel the same way about the common practice in the software development industry of introducing light, standard, and professional versions of applications. My experience is that creating a family of software products is an excellent way to increase microISVs' sales.

Instead of the "vertical thinking" that I've described above in the cola example, Kotler encourages us to engage in lateral thinking. Examples would include fuel stations selling snack food, and food suppliers including toys in their products.

These lateral moves allow us to create new product categories, Kotler says, and to develop new markets. It's certainly an approach that software developers should consider when deciding which application to develop next - especially in our world of desktop/laptop software, software as a service (SaaS), smartphones, tablets, and cloud computing.

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