What means product diversification?

Product diversification is the practice of expanding the original market for a product. This strategy is used to increase the sales associated with an existing product line, which is especially useful for a business that has been experiencing stagnant or declining sales.

Why is product diversification good?

Brand strength: Product diversification can help companies build robust brands with strong visibility. Consumers are more likely to identify and remember brands that offer more variety and options within their products or services.

How does Coca Cola use diversification?

As growth in the carbonated soft drinks market slows and consumer’s preference shifts towards healthier beverages, Coca Cola is diversifying its portfolio to establish a strong presence in other beverages. The investment will primarily fund new manufacturing lines, distribution capabilities and cold drink equipment.

What is the product mix?

Product mix, also known as product assortment or product portfolio, refers to the complete set of products and/or services offered by a firm. Consumer behavior reveals how to appeal to people with different habits tend to use together or think of as similar products or services.

How can a company diversify?

A diversified company owns or operates in several unrelated business segments. Companies may become diversified by entering into new businesses on its own by merging with another company or by acquiring a company operating in another field or service sector. Conglomerates are one common form of a diversified company.

What is product unrelated diversification?

Unrelated diversification: When a firm enters an industry that lacks any important similarities with the firm’s existing industry or industries.

What are the three types of diversification?

There are three types of diversification: concentric, horizontal, and conglomerate.

What is Starbucks diversification strategy?

Starbucks Corporation is expanding its Evolution brand by introducing new snack bars under the brand’s Harvest line of products. In addition, its Evolution Fresh will be available in 8,000 cafes and grocery stores by the end of the year.

How does Tesco use diversification?

And it has diversified its market from only being a food retailer to selling fuel, clothes, housing, finance, banking, insurance, mobile broad band and electronics.

What does it mean to diversify a product?

What is Product Diversification? Product diversification is a strategy employed by a company to increase profitability and achieve higher sales volume from new products. Diversification can occur at the business level or at the corporate level

What is the main purpose of diversification?

Diversification is a strategy that mixes a wide variety of investments within a portfolio.

Why do companies diversify?

Companies ultimately diversify to improve their sales and reduce business risk. Diversification presents risks and opportunities for companies, but ultimately helps them set and achieve long-term goals and reduce the risk of failure, say authors at Investopedia .

What is the advantage of product differentiation?

Advantages Of Product Differentiation. Besides being an imperative for survival in the competitive market, product differentiation has following advantages: Creates Value: Product differentiation gives a reason to the customers to choose the brand over others.