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Marketing strategies
Products pass through distinct life cycle stages characterized by changing sales, costs, and profits. The four stages are: introduction (low sales, high costs), growth (rising sales and profits), maturity (peak sales, high competition), and decline (falling sales and profits). Strategies must adapt to the challenges of each stage, focusing on creating awareness early, maximizing market share in growth, defending share in maturity, and reducing expenditures in decline. Modifying the product, market, or marketing mix can sometimes prolong the maturity stage.
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Marketing strategies
- 2. Product LifeCycle Strategies INTRODUCTION STAGE GROWTH STAGE MATURITY STAGE DECLINE STAGE
- 3. Product lifecycle is the course of a product’s sales and profits over time. Product life cycle(PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures
- 4. When we saythat a product has a life cycle we assert four things: Products have a limited life. Products sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. Profits rise and fall at different stages of the product life cycle. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life – cycle stages.
- 5. Product Life-Cycle Sales and Profits Time Product Introduction Growth Maturity Decline Develop- ment
- 6. Type ofproduct Level of competition Marketing support of the product Customer taste
- 7. Promotion High Low Rapid- Slow- High skimming skimming strategy strategy Price Rapid- Slow- Low penetration penetration strategy strategy
- 8. The costsare very high low sales volumes to start Little or no competition Demand has to be created Customers have to be prompted to try the product
- 9. The needfor immediate profit is not a pressure. The product is promoted to create awareness Heavy expenditures to create trial for Sales Promotion
- 11. Introduction Stage ofthe PLC Low sales Sales Costs High cost per customer Profits Negative Marketing Objectives Create product awareness and trial Product Offer a basic product Price Use cost-plus Distribution Build selective distribution Build product awareness among early Advertising adopters and dealers
- 12. costs reduceddue to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players in establishing market increased competition leads to price decreases • Sales Promotion – Reduce expenditures to take advantage of consumer demand
- 13. Improves productquality and adds new features and improved styling. Adds new models and flanker products(i.e., products of different sizes, flavors, and so forth that protect the main product). It enters new market segments It increases its distribution coverage and enters new distribution channels. It shifts from product- awareness advertising to product- preference advertising. It lowers price to attract the next layer of price – sensitive buyers.
- 15. Growth Stage ofthe PLC Sales Rapidly rising sales Costs Average cost per customer Profits Rising profits Marketing Objectives Maximize market share Product Offer product extensions, service, warranty Price Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market
- 16. costs arelowered as a result of production volumes increasing and experience curve effects sales volume peaks and market saturation is reached increase in competitors entering the market prices tend to drop due to the proliferation of competing products brand differentiation and feature diversification is emphasized to maintain or increase market share Industrial profits go down
- 17. –Profits continue togrow and stay positive throughout –Competition is most intense at this stage; many versions and brands –Strategies to prolong this stage: • Modify the market • Modify the product • Modify the marketing mix
- 18. Three potentially usefulways to change the course for a brand are market, product, and marketing program modification. Product modification Trying to stimulate sales by modifying the product’s characteristics through 1.Quality improvement Eg: Aashirvaad, Annapurna,Nature fresh 2. Feature improvement Eg: Pulsar 180 to Pulsar 220 3. Style improvement Eg; New car models, New Coke
- 20. Maturity Stage ofthe PLC Sales Peak sales Costs Low cost per customer Profits High profits Marketing Objectives Maximize profit while defending market share Product Diversify brand and models Price to match or best competitors Price Build more intensive distribution Distribution Advertising Stress brand differences and benefits
- 21. costs becomecounter-optimal sales volume decline or stabilize prices, profitability diminish Sales of the new product drop quickly as the target market(s) move on to other things Profits decline as competitive pressures force lower prices and set promotional spending at a level that maintains the share
- 22. – Decisions aboutthe product • Maintain spending levels to fight it out for what is left • Harvest by cutting spending and riding it out. • Drop the product and move on to the next thing
- 24. Eg. 5.25 Floppy disk
- 25. Decline Stage ofthe PLC Sales Declining sales Costs Low cost per customer Profits Declining profits Marketing Objectives Reduce expenditure and milk the brand Product Phase out weak items Price Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers
- 26. INTRODUCTION GROWTH MATURITY DECLINE 10-26
- 27. Marketing management–Philip Kotler Kevin Keller Abraham Koshy Mithileshwar Jha
- 28.