Marketing
The Product Life Cycle
Introduction
Growth
Maturity
Decline
Define Introduction - The Product Life Cycle
Create Customer awareness: Slow sales growth, high R&D cost; high marketing spending
Price skimming
Penetration pricing
Define Growth - The Product Life Cycle
Product differentiation - Increase in sales, profit, distribution and competition. New features added; price reflex competition profits often
Define Maturity - The Product life cycle
Focus on market share - Slowdown of growth in sales and profit well-established competition. Pricing is a promotional tool and product innovation is a priority
Define Decline - The product life cycle
Delete, reinvent, or harvest - Harvesting company keeps product but reduces marketing support in attempt to recap profits
Describe high-learning products
Extended introductory period, consumer education is required; Example: movie streaming services
Describe Low-Learning Product
Short introductory stage, benefits self-evident, little consumer education required. Example: Apple aripods
Modifying the market
Finding new customers (Harley Davidson = Women)
Increasing product use (Cambell soup... = Warm months)
Creating a new situation (Rice Crispies... = Baking ingredient)
Repositioning a product
Motorola Flip phone?
New product: Type of product
Minor innovation
Continuous Innovation
Radical Innovation
Define Minor Innovations (and Example and Marketing emphasis)
Requires no new learning by consumers
Example: New and improved toothpaste or detergent
Marketing Emphasis: Gain consumer awareness and wide distribution
Define Continuous Innovation (Example and Marketing Emphasis)
Changes consumers normal routine but does not require totally new learning
Example: Swiffer wet jet - Wearable technology
Marketing Emphasis: Advertise points of difference and benefits to consumers
Define Radical Innovations (Example and Marketing Emphasis)
Requires new learning and consumption patterns by consumers.
Example: Amazon Alexa or google home; Self - driving cars; 3D Printers
Marketing Emphasis: Educate consumers through advertising product trial, and personal selling; public relations can play a major role
The Adoption Curve
Innovators - 2.5%
Early Adopters - 13.5%
Early Majority - 34%
Late Majority - 34%
Laggards - 16%
The adoption Curvem - Innovators
Venturesome; higher educated: Use multiple information source
The adoption curve - Early Adopters
Leaders in social settings; slightly above average education
The adoption curve - Early Majority
Deliberate: Marry informal social contacts
The adoption Curve - Late Majority
Skeptical: Below average social Status
The adoption Curve - Laggards
Fear of debt: Neighbours and friends are information sources
New 7 Product Development Process
1. New product development strategy
2. Idea Generation
3. Screening and evaluation
4. Business Analysis
5. Development
6. Test Marketing
7. Commercialization
Describe New Product Development Strategy
Identify new-product development focus that meets company objectives
Describe Idea Generation
Brainstorm new ideas
Describe Screening and evaluation
Evaluate product ideas and develop concepts
Describe Busness Analysis
identify the product features and its marketing strategy and make financial projections
Describe Test Marketing
Test the product and marketing strategy in the marketplace on a limited scale (if necessary)
Describe Development
Create the prototype and test it internally at the company and externally with consumers
Describe Commercialization
Launch and fully market the product in the marketing
Penetration pricing
Low Initial price for new products
Prestige Pricing
High Prices so that quality or status-conscious consumers are attracted.
Describe Above, at, or below market pricing
"Market Price" Is what customers are generally willing to pay; used as a benchmark.
- Above: Rolex
- At:
- Below: Walmart