Shareware Beach

Wednesday, 1 December 2004

Line Extension Good or Bad?

Filed under: Marketing — Jan @ 7:24

Scott Miller points out the absurdity of Diet Cherry Vanilla Dr. Pepper. He argues the big soft drink manufacturers have gone way too far extending their brands. This makes them vulnerable to a smaller player touting their single drink as “the real thing”. The irony that this used to be Coca Cola’s slogan will only enhance the smaller player’s campaign.

If you’re still in doubt that using the same brand name for different products is a bad idea, here’s some additional evidence. Here in Thailand, I can buy Coke, Diet Coke, Pepsi, Diet Pepsi, Sprite, 7-Up, Fanta, and three flavors of Miranda. That’s right: almost none of the line-extension flavors are available here. Even the soda companies themselves implicitly admit that all those additional flavors make no sense. If they were profitable, they’d be available all over the world. And if you argue that Thailand is still a 3rd world country, the situation back in Belgium is almost the same. Miranda is not avialable at all, and instead there’s three flavors of Fanta.

How does this relate to shareware? Something I often read in discussion forums is the “advice” to split a product into a Lite and more expensive Pro version. Something I read just as often is the experience that when somebody does this, almost everybody buys the Pro version. If that is so, then the Lite version should be eliminated. It will increase sales, and reduce customer confusion. A single product or brand cannot be everything to all people.

A piece of software can’t be the best hobbyist’s tool for occasional professional use by experts who use it 10 hours a day. If you send out that kind of message, people in all 3 target markets will think the product is primarily aimed at the other two, and will buy a competing product that only targets their own demographic. Unless all your competitors are doing the same thing, and there’s no way for customers to escape confusion. But sooner or later somebody is going to get smart (or just lucky) and make a big splash by really satisfying one third of what you thought is your market, but is really three markets.

Line extension isn’t always bad, though. If the target market for a variant of your product is very small, a separate product may not be viable. However, even then, be careful. It may be wiser to offer the additional functionality as an add-on or plug-in that can be purchased on top of the original product. Then people who don’t need it, won’t be confused by different versions of your product, since there are none. However, do expect to get requests for and to develop additional plug-ins for other market segments. Otherwise, you still run the risk that people will think you’re only targeting that segment.

HelpScribble has always had some extra support for Delphi developers, simply because that’s my development tool of choice. I used to advertise this quite heavily on HelpScribble’s web site. The result was that people thought HelpScribble was only useful for Delphi developers. Not true. It generates standard help files, compatible with all Windows development tools. So now HelpScribble’s web site takes about most of the popular Windows development tools, and Delphi is just one among the list. Unless you click the Delphi link on the web site, you won’t know about the special support.

Don’t assume people will actually read your marketing stuff. They’ll just glance over it, and remember what catches their attention. If you mention your favorite development tool 7 times, but never mention the one the prospective customer is using, they’ll draw their conclusions, correct or not, and move on.

The only line extension you’ll find among JGsoft products is EditPad Lite and EditPad Pro. The Lite version is freeware, and aims to seed the market. My thinking is that since there’s a wide choice among freeware editors, it’s a good idea to provide a free version of EditPad as well. People using EditPad Lite are more likely to upgrade to EditPad Pro than to another text editor. The Lite version is definitely generating sales for the Pro version. But the Lite version is also definitely stealing sales from the Pro version, when people decide that Lite is good enough for them. Overall, I believe the balance is positive, given the fact that there are so many alternative “lite” editors. But if there weren’t, there wouldn’t be an EditPad Lite either.

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