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Bevan ianmarketing
- 1. Product differentiation Chapter 10 Concepts Palm V Customer advantage
- 2. Product differentiation Two Ways Image differentiation Personnel differentiation
- 3. Product Life Cycle Concept Cradle to grave marketing outlook Broken into 4 phases Maturity Growth Decline Introduction
- 4. Assumptions: Product Life Cycle Concept Limited life for each product In Each Stage Different sales and profits Different strategies in: Marketing Financial ManufacturingHuman resources
- 5. Life cycle patterns Xerox Europe 1st copier life cycle Refurbish & Re-sell (repeat)
- 6. Introduction Stage Introduction High Prices Low sales Heavy Marketing Early Adopters
- 7. Introduction Stage Marketing Strategies For Pioneers New Mkt Original Mkt Don’t just jump in. Do your research Find a new Mkt segment Heavy Marketing
- 8. Introduction Stage Marketing Strategies For Pioneers New Mkt Create a new product New Model of 1st product
- 10. Find / fix failures of pioneer
- 13. Growth Stage Marketing Strategies Better Quality New Market Segments Increase Distribution Marketing Preference, not existence Price Cuts!
- 14. Mature Products
- 17. Over capacity
- 21. Shake outThe Big Three
- 22. Changing Brand Course 3 main changes Market modification Product modification Marketing modifications
- 23. Marketing Program Modifications Should we modify? Price Distribution Channels Advertising Personal Selling Sales Promotions More Services
- 24. Decline Stage Decline Stage Foreign / Domestic Competition Technology Advances Declining sales Change in Taste
- 25. Decline Stage Options Hang on Keep only strong products Reduce to minimum level of operations Cut prices Divestment Harvesting
- 26. Critique of Product Life Cycle Patterns too variable Hard to tell what stage products are in Self-fulfilling results
- 27. Critique of Product Life Cycle Patterns too variable Hard to tell what stage products are in Self-fulfilling results
Editor's Notes
- Thanks Dale, I’ll start by talking a bit about product differentiation and creating competitive advantage (more ch 10 concepts). Customer advantage is a type of competitive advantage in which product developers maximize what esthetic and functional needs customers REALLY want. As we learned in P&S IDEO is great at differentiating this way
- Another part product differentiationImage differentiation of stores, logos, brands, etc (apple does a good job of this)Personnel differentiation: finding ways to provide unique and or superior service
- Now we are going to talk about product life cycle concept of marketing. It is essentially a cradle to grave marketing outlook, broken up in 4 key stagesIntroductionGrowthMaturityAnd Decline
- I’ll go into the 4 stages in a second but first there are some assumptions made in this marketing methodologyAll products have limited lifeAll products have different levels of sales and profits in different stagesDifferent stages need different levels of marketing, financial, manufacturing and human resources
- As you might remember from case studies of the past, Xerox Europe uses modular design to they have a normal life cycle and a successive recycling phases thanks to smart modular designs
- So as mentioned before there are 4 stages of a product’s life cycle and the first is the introductory stage. This stage is marked by low sales, high prices, and heavy marketing, which hopefully lead to many very enthusiastic early adopters. (cough ipad)
- For pioneers (originators of a product),Do research before entering they must market heavily in the introduction stage. It is a good idea to identify a second market and create a second product to appeal to that marketThen create a new model of the first productinnovate quickly to stay ahead of the curve
- For pioneers (originators of a product),Do research before entering they must market heavily in the introduction stage. It is a good idea to identify a second market and create a second product to appeal to that marketThen create a new model of the first productinnovate quickly to stay ahead of the curve
- For those trying to ride the coat-tails or completely dethrone the pioneer, you have certain advantages. You know the model and this eliminates much of the R&D, so you can instead focus on where the pioneers messed up, improve upon these mistakes, market your difference and keep innovating.
- On average, the growth phase lasts 8 years according to the Kottler and keller book. In this stage, sales are increasing, prices are still higher than when products are mature but they are slowly dropping. Much of the profits go to output expansion and marketing attention to get even more early adopter consumers. At the end of the growth phase (assuming you started as a pioneer), the competition is out to get you.
- Marketing strategies in the growth phase include marketing any quality improvements, finding new market segments, increasing distribution, shifting marketing from awareness of products very existence to creating long term consumer preference. And to hook the remaining laggards who have not bought your product, you guessed it, price cuts!!!
- Yes, you are reaching maturity. The there are no more early adopters, only jealous laggards. Not only your mom but your grandma has one. Pee wee herman for god’s sake!
- The mature stage of a product’s life cycle is the longest and thus warrents a bit more attention. Most products are mature. Here are the three stages. I’ll explain the first and the last. But before we get there, lets look at the growth stage, which is marked by a strong reduction of sales growth, No new distribution channels, new competition emerges
- In the declining stage of maturity, sales are prettymuch in the doldrums, there is an overcapacity to produce, intense competition, frequent markdowns, increased advertisement, which can lead to a shake out and many less positioned competitors die, often resulting in “the big three” leaders
- Three options exist for mature that need to change the brand’s course. One like the newspaper industry, find new market segments for your products. Product modification is another option. Remember domino’s attempts to convince us their pizza isn’t nasty anymore? I don’t know is it true? Anyway.. Under marketing program modifications, there are things you can do here
- Marketing program modifications for a mature product, you should consider new pricing, distribution channels, advertising (don’t know if this is working for american apparel who is probably in the declining stage from what I hear), you can offer more services, better selling staff, Sales promos (cupons, rebates, free gifts)
- Declining Sales is a stage where society is losing interest in your product. Ouch! This stage you guessed is marked with declining sales, technology advances (not to your advantage…see that guy, that is your product), Tastes have changed (kinda like I wouldn’t want excess inventory of Kanye west glasses right now), and to boot foreign and domestic competition is nipping at your heels
- But don’t let goWell maybe let go of the weaker product lines but hang on to the strong(er) onesReduce to absolute minimum levels of operationCut pricesIf it is the end, you can divest in operations in an appropriate way given people’s livelihoods (jobs are being lost). Eventually the aim is to sell the product. Or you can try to keep your production line in the dark and make one last batch for excess inventory to be sold (tough decisions) Some products that do hang on make it
- I can see why there are critics of this method. On paper it sounds reasonable and linear but really, each of the components in each stage are in flux, and the stages last a long time. Often It is impossible for marketers to know for certain what stage their product is really in and if you assume your product is mature isn’t it a self-fulfilling prophecy to prepare for the next decline stage?
- I can see why there are critics of this method. On paper it sounds reasonable and linear but really, each of the components in each stage are in flux, and the stages last a long time. Often It is impossible for marketers to know for certain what stage their product is really in and if you assume your product is mature isn’t it a self-fulfilling prophecy to prepare for the next decline stage? Now Tania and Val are going to look at the marketing mix