Ulrike has once again pointed out a good example to me, this time of a product development strategy straight out of the Ansoff matrix.

Taking on stiff competition

I’ve noticed the traditional German cuddly toy maker trying to do something about the dwindling birth rates in Germany before, most obviously by targetting older buyers in the media (who’ll buy gifts for kids), and more subtly by opening Steiff outlets in up-market shopping malls.

But this recent example is providing the same customers with new products. It’s costly (product development is always more expensive than just offering an unchanged product to new markets). It gets you involved with a completely different competitive set. You’ll also need new skills. But it’s a new potential source of income and thus another leg to stand on if it’s a rocky ride – ie another way to spread risk.

Hopefully for Steiff the children it’s targeting with this brand extension are also willing to wear the bear – and don’t think Steiff’s a baby brand. That’s not the sort of thing that earns street cred in the playground.

One thing Ulrike pointed out: why “bei Steiff” when the rest of the ad is in English?!