Product Line Extension When Inert Coatings Make Sense

July 14 2017 SilcoTek

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SilcoTek® offers high performance corrosion resistant, inert coatings to a diverse range of customers.  From the researcher who needs a specific surface for their test, to large corporate customers offering OEM products.  For larger customers a product line extension featuring our coatings can be a profitable venture.  

Often our Sales and Marketing team have a view from both sides of the sales transaction.  We'll get a call from an end user frustrated by long delivery or poor service from an obstinate OEM manufacturer who won't offer stock products or improved delivery.  Often those customers elect to send in products to us for coating without the OEM interface to reduce the lead time.  We'll shake our head at the lost opportunity in customer satisfaction and added profits OEM manufacturers are missing in failing to offer our coatings as part of their standard product offerings.  

At SilcoTek®, we view our coatings as a win-win for both the customer and manufacturer.  The customer gets the improved product performance they want, and the manufacturer gets a satisfied customer and an enhanced product with minimal investment.  So why don't more OEM manufacturers take advantage of an improved product offering?  It's not just a make or buy decision here, the decision to extend of brand or offering can can be complex and should not be taken lightly.  The product universe is littered with bad brand extension decisions.  Fear aside, here are some tips and guidelines for when to integrate our coatings as part of a product line extension.

Number one rule of a new product or brand extension: The product must fill a customer need, not be initiated at the convenience of the manufacturer's internal metrics.  Manufacturers must first and foremost focus on customer satisfaction, not short term internal objectives.  


Learn how our coatings improve OEM customer satisfaction.  

Read our case studies.


The negative side of brand extensions.

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Done incorrectly, a brand extension can have many down sides.

Significant risks should be factored into whether to initiate a brand extension that go beyond a simple cost calculation.  


Consider the following:

  • Will the product line become over segmented?  Can the role of each product offering be clearly defined and explained to the customer?
  • Consider brand loyalty and brand dilution.  Factor in the risk of confusing the customer or driving the customer to competitor offerings.
  • Diluted or excessive extensions may cannibalize existing offerings and become a net zero gain in revenue at the cost of additional SKUs or a confusing list of overlapping offerings.
  • Factor in total cost including development, opportunity cost, stock or part number management, marketing cost, training cost, R&D/engineering, sales training.
  • The line extension must benefit the customer and core product brand promise.  Must align with the company overall strategic initiatives.

OEM manufacturers consider several factors when including SilcoTek in their product offering including:

  • Lead time: SilcoTek's 5-10 day lead time saves your customer time.  Making your product a more attractive option vs. competitors.
  • Cost: We offer volume pricing and licensing options to reduce overall processing cost.
  • Shipping: We offer international shipping support, domestic shipping is easy with our easy-to-follow shipping instructions.
  • Fixturing:  Our engineering specialists offer custom fixturing to assure the highest quality coating.
  • IP protection:  SilcoTek's in house IP support specialist can help secure intellectual property and co-developed technology
  • Stocking options:  We offer kanban and other inventory management options to optimize cost control.
  • Cost of integrating coatings into the supply chain:  SilcoTek Engineering and R&D staff work with customers to optimize product development and integration.
  • Systems interface:  Our Customer Service Team routinely interfaces with customer purchasing portals.  Reducing purchasing cost. 



Really want to run some numbers?  

SilcoTek offers licensing agreement to improve profitability and line integration.



With all the potential negative issues surrounding a new offering, it's no wonder some OEM companies are hesitant to incorporate a new product into their product line.  But here's the hitch, without new, innovative products and by not lending an ear to customer needs; companies run the greater risk of losing out on innovation and product initiative.  A slow death begins! 

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To grow your customer base and assure increasing revenue, you've got to identify and fill customer needs.  So here are some guidelines for implementing a new product or brand extension:

  • Assure customers benefit; talk to customers and listen to their concerns, challenges and needs.
  • Get cost accounting in order.  Know the cost of not only the price of materials or inventory cost, but indirect costs such as research, marketing, sales, etc.
  • Develop a thorough implementation strategy detailing every segment of the organization and product line, including quality, sales, marketing, manufacturing.
  • Know what your brand is known for and align the product with your core goal.  Extend brand and align with brand architecture.
  • Develop a simple, concise & clear benefit of the product and stick to that promise. 

Benefit of a successful brand extension:

How do companies benefit from a new product or brand extension?  

  • Energize the brand, new face on an old product.  Makes the brand relevant, interesting and visible.
  • Expand core promise to customers
  • Manage true innovation.
  • Block competitors from filling the void.
  • Increase sales! 

Hundreds of SilcoTek customers have improved their product quality, satisfied their customer needs and increased product sales by incorporating SilcoTek coatings into their product mix.  Here are a few ways customers have adapted their products to extend their brand and satisfy a customer need:

See How We Perform  In Your Application

SilcoTek's marketing and sales team know how our products can fit into a variety of product offerings.  If you're interested in understanding how our products can improve your brand and expand your profits, contact us for a consultation.