product life cycle and marketing mix

knowledge of the life cycle is useful for marketing strategy decisions:

1. anticipate that sales and profits will assume a predictable pattern throughout the life cycle stages 2. shift promotional emphasis from product information in the early stages to brand promotion in the later ones 3. different marketing emphasis: stimulate demand, cultivate selective demand, market segmentation 4. maximise sales and profits at each stage through appropriate promotional efforts

product life cycle

The stages through which goods and services move from the time they are introduced on the market until they are taken off the market.

early adopters

considered to be opinion leaders but require persuasion, while receptive to change

evaluation

consumer decides whether or not to believe that this product or service will satisfy the need - a kind of "mental trial"

awareness

consumer is first exposed to the product innovation

trial

consumer uses the product on a limited basis

adoption

if trial is favourable, consumer decides to use the product on a full, rather than a limited basis - if unfavourable, the consumer decides to reject it.

consumer adoption categories

innovators early adopters early majority late majority laggards

growth - marketing mix

product: introduce a variety of product offerings promotion: provide more detailed information about the products and its competitive advantages and/or any technology breakthroughs pricing: my need to be decreased in order to remain competitive place: increase scope of relevant retailers and distributors, and try to develop exclusive channels where possible goal: grow market share and encourage loyalty

maturity - marketing mix

product: introduce product line extensions promotion: maintain a clear brand positioning. Engage customers with the brand pricing: stabilize pricing, but relative to competition place: retain key retailer relationships and work towards in-store placement and being the preferred brand for the retailer goal: retain market share and generate profits

introduction - marketing mix

product: offer a basic product - test the overall market demand/interest promotion: generating initial awareness and building positioning pricing: stimulate purchase but high enough to try and recoup costs distribution: target retailers and distribution channels goal: get buyers to try new product

decline - marketing mix

product: progressively reduce overall product line and variations promotion: look to low-cost ways of selling products to repeat long-term customers alternative: where possible, look for repositioning opportunities to "reinvent" the product or category in the marketplace distribution: reduce smaller and less supportive retailers over time goals: remain profitable: keep or phase out the product.

growth

sales grow, more firms enter the market and more distributors are willing to stock the product key for establishing . product's position in a market, increasing sales, and improving profit margins challenges: increasing competition lower prices opportunities: greater consumer awareness increase in profits

introduction

sales slowly grow as the products is introduced in the market all about building the demand for the product with the consumer, and establishing the market for the product challenges: small or no market high costs losses, not profits opportunities: limited competition capture a large market share

late majority

sceptics who are not keen on change and will only adopt a new product or service if there is a strong feeling of being left behind or missing out

interest

the consumer seeks information about the new product

decline

the market for a product will start to shrink and the product gets eclipsed by the new products decline is demonstrated by the fall in sales and profits. market becomes saturated (i.e. all the customers who will buy the product have already purchased it) or because the consumers are switching to a different type of product challenges: market in decline falling sales and profits opportunities: cheaper production cheaper markets

production adoption

the process by which a consumer or business customer begins to buy and use a new good, service, or idea

maturity

the product and competition is established- product modifications or improvements might give a competition advantage during the maturity stage, the primary focus for most companies will be maintaining their market share challenges: sales volumes peak decreasing market share profits will peak opportunities: increased market share through differentiation continued reduction in costs

early majority

these are followers and are often cautious about new products before purchasing

innovator

they are a small group of people exploring new ideas and technologies

laggards

typically they prefer traditional communications and will adopt new products when there are no alternatives