chapter 7- the product life cycle

early adopters

(13 percent)—Product opinion leaders seek out new products consistent with the personal self-image. This group is not price-sensitive and is willing to pay the price premium for a product. At the same time, early adopters demand a high level of personalized service and product features.

laggards

(16 percent)—Product avoiders want to evade adoption as long as possible. Resistant to change, they will put off the purchase until there is no other option.

innovators

(2.5 percent)—Product enthusiasts enjoy being the first to try and master a new product. Individuals in this group are prime candidates for beta testing and represent a good source of feedback late in the product development process or early in the product launch phase.

late majority

(34 percent)—Product followers are price-sensitive and risk-averse. They purchase older generation or discontinued models with lower prices and fewer product features.

early majority

(34.5 percent)—Product watchers want to be convinced of the product's claims and value proposition before making a commitment. This group is considered critical to long-term success as they take the product into the main stream.

Growth Stage Options

- Improve product quality - Add new product features and models - Enter new market segments and distribution channels - Shift some ads from awareness to conviction and purchase - Lower prices at right time to attract new buyers

4 p's of marketing

Product- Variety, quality, design, features, brand name, packaging, services Price- List price, discounts, allowances, payment period, credit terms Place- Channels, coverage, locations, inventory, transportation, logistics Promotion-Advertising, personal selling, sales promotion, PR

product life cycle summary

The 4 Ps of Marketing Product, promotion, price, place Product classifications Convenience, specialty, shopping, unsought Stages of the product life cycle Introduction, growth, maturity, decline Adoption and diffusion process Awareness, interest, evaluation, trial, adoption Innovator, early adopter, early mainstream, late mainstream, laggard International marketing Standardization and adaptation

what are the 5 phases of the consumer adoption and diffusion process

1. awareness 2. interest 3. evaluation 4.trial 5. adoption

product classifications: CONSUMER GOODS

1. convenience goods 2. shopping goods 3. specialty goods 4. unsought goods

what is a challenge for international marketing

Challenges: To find what products and services to introduce and in which countries Standardization or Adaptation: To decide on how much to standardize or adapt the products and services for world markets

product classifications: convenience goods & shopping goods

Convenience goods: Frequently purchased, relatively low-cost products customers have little interest in seeking new information rely heavily on prior brand experience and purchase behavior. subgroups include staples, impulse products, emergency goods. Shopping goods: Products that require consumers to do more research and compare across product dimensions such as color, size, features, and price.

Consumer Adoption & Diffusion Process

Innovation diffusion process is how long it takes a product to move from first purchase to last purchase (the last set of users to adopt the product). An individual moves through five stages before adopting a product picture represents the diffusion of innovators

Decline Stage Options

Maintain: Reposition or reinvigorate in hopes of moving back to the growth stage Harvest: Reducing various costs (plant, equipment, maintenance, R&D, advertising, sales force), hoping that sales hold up Drop: Sell to another firm, liquidate at salvage value (don't harvest before you sell)

maturity stage options

Modify the market Increase consumption by finding new users and new segments for its brands Modify the product Changing characteristics such as quality, features, style, packaging, or technology platforms to retain current users or attract new ones Modify the marketing mix Improving sales by changing one or more marketing mix elements (e.g., new services, lower prices, better advertising, or new marketing channels)

product decisions affect other marketing mix elements

Pricing: Individual product pricing within the product line "good, better, best" product line strategy Technology companies face special challenges as newer models have better features and lower prices Marketing Communications (promotion: Focus on a single product or the brand? Allocation of budget: Most popular products? Entire line? New products? Place: Heavily customized products can not practically utilize intensive distribution

Decline Stage

Product: Consider product expenses in terms of return on investment. Price: Decide whether to invest further in product or allocate funding to new project(s). Offer product at low price point to try to stimulate any remaining demand. Significant price pressures from both competitors and more price-sensitive consumers. Communications: Cost of continued investment in marketing communications not justified by market conditions. Distribution: Reduced distribution channels. Channel members cease to support the product.

Introduction stage

Product: High-quality, innovative design providing new benefit to consumers. Features well-received and understood by target consumers. Price: Price skimming or penetration Communications: Inform and educate target audience about the product's features and benefits. Promotion focused on product awareness and to stimulate primary demand. Distribution: Wide distribution network with limited product Availability: Create anticipation by promoting excitement and sense of scarcity. Limit distribution but increase product availability: Release to limited number of target markets with high availability. Intensive personal selling to retailers and wholesalers.

Growth Stage

Product: More features and better design, learning from issues from first generation. Diversification of product and release of complementary products/services. Price: New and improved models sold at high price points. Existing models or earlier generations move down in price. Promotion: Link the brand with key product features and highlight differentiation between competitors. Promotion emphasizes brand advertising and comparative ads. Distribution: Broaden distribution networks to keep up with expanding market demand.

Maturity Stage

Product: Product lines are widened or extended. Work to further differentiate product from those of competitors. Price: Target high-end market with differentiated product and higher price point. Communications: Challenge of deciding between short-term sales promotions or investing more in the brand. Distribution: Product has reached its maximum distribution. Channel members identify weak products and begin dropping out if necessary.

product classifications- specialty goods and unsought goods

Specialty goods: based on a defining characteristic (real or perceived) for the consumer. Decisions frequently minimize the number of different product choices and focus less on price more willing to seek out the product; expectations are higher. Unsought goods: consumers do not seek out and often would rather not purchase at all. E.g., insurance

Stage in Product Life Cycle

introduction, growth, maturity, decline