Final answer:
Companies may choose line extensions or product withdrawals instead of product line modernization to cater to different customer preferences and allocate resources more efficiently. These strategies allow companies to increase market share and focus on developing newer and more innovative products without the need for significant changes to the entire product line.
Step-by-step explanation:
Companies may choose to think of line extensions or product withdrawals instead of product line modernization for several reasons.
Firstly, line extensions involve introducing new variations or flavors of an existing product. This allows companies to cater to different customer preferences and increase their market share without the need for significant changes to the product line. For example, a company that produces shampoo may introduce a new line extension with different scents or ingredients to target specific customer segments.
Secondly, product withdrawals may occur when a company decides to discontinue a particular product due to various reasons such as declining demand, outdated technology, or a shift in consumer preferences. This allows companies to allocate their resources more efficiently and focus on developing newer and more innovative products. For instance, a company may decide to withdraw a smartphone model that has become outdated and invest in the development of a newer version with advanced features.
Lastly, product line modernization involves updating or redesigning an entire product line to meet changing market trends or customer needs. While this can be beneficial, it often requires significant investment, research, and development. Companies may choose not to go for product line modernization if they believe that line extensions or product withdrawals would be more effective and cost-efficient in achieving their business goals.