Final answer:
Product differentiation and cross-selling are strategies that involve developing and selling new products to people who are already purchasing the firm's existing products. Product differentiation focuses on making the products unique and appealing to existing customers, while cross-selling involves offering complementary products to existing customers.
Step-by-step explanation:
One strategy that involves developing and selling new products to people who are already purchasing the firm's existing products is product differentiation. This strategy focuses on making the firm's products different from those of its competitors through physical aspects, location, intangible aspects, or perceptions of the product. By making their products unique, firms can attract customers who are already familiar with their existing products and convince them to try the new offerings.
An example of product differentiation is when a smartphone manufacturer releases a new model with updated features and a sleek design. This new product appeals to existing customers who have already purchased previous models of the same brand. The manufacturer emphasizes the unique features and advantages of the new model to entice their existing customer base to upgrade.
Another strategy that can be used is cross-selling. This involves offering additional and complementary products to customers who are already purchasing the firm's existing products. For example, a company that sells fitness equipment can cross-sell related products such as workout gear, nutritional supplements, or fitness tracking devices to their existing customers.