This feature was placed by Vype.
For SME businesses it is vital to move with the market and consumer trends, one way of doing this is to diversify your products or services. Many growing or relatively new businesses choose to expand their product range and diversify into new areas as a way of appealing to new customers and offering more to existing customers. So how do you diversify and expand without affecting your core business in a negative way?
Here are a few tips:
Take the time to think about the needs of your target market and try to identify any new opportunities that will enable you to try and stay ahead of competitors. Is there a gap in the current market? Ask for feedback from customers, they are the ideal way to get industry insights. Could you expand the range of goods you currently offer?
Consider whether your business is at the right stage to diversify and expand. It is important your core business and products don’t suffer if you decide to expand and offer additional products. Set down in writing certain criteria that you want to achieve such as volume of sales or return on investment.
Assess the strengths and weaknesses of your business as it stands, this can help you to come up with a shortlist of areas you could potentially diversify into.
Research your sector and industry carefully; there is always an amount of risk when launching new products. Think about the potential impact on your image and brand. Ask staff their opinion; they know the business and customers.
One example of how one industry is diversifying is the emerging electronic cigarette market. The electronic cigarette market is rapidly expanding with market consultants at Euromonitor estimating that the world market for e-cigarettes came in at over $2bn last year with early predictions that it will exceed that by the end of this year.
Bonnie Herzog, an analyst at Wells Fargo, predicted that by 2023 there could be more people using electronic cigarettes than smoking traditional tobacco cigarettes.
The tobacco industry is worth billions of dollars and is big business; potentially e-cigarettes could pose a threat to big tobacco companies.
A number of large tobacco companies have made the decision to diversify from traditional cigarettes into electronic cigarettes. They saw a potential opportunity and a huge emerging market, and expanded to stay relevant. One of the large-scale tobacco companies who have chosen to move into the e-cigarette market is British American Tobacco (BAT), who this year launched Vype.
The recent trend in the e-cigarette market is for devices which look similar to tobacco cigarettes rather than the larger first generation devices which had little resemblance to cigarettes. BAT have picked up on this trend and have designed Vype disposable electronic cigarettes to look and feel like a tobacco cigarette.
They are aimed at existing smokers, who are obviously their current target market and designed a product which appeals to them. The new product is a similar weight and size to a tobacco cigarette, has a soft-tip filter and features an LED light which glows a soft red when in use. This example, demonstrates how BAT have used their existing knowledge and expertise in the smoking market and applied it to a new product and market.