There are four cycles in a product’s life: introduction, growth, maturity, and decline. Production, pricing, distribution, and marketing all differ depending on which stage the product is in. Each cycle will be defined with an example product and its marketing methods examined. Introduction A product in the introduction stage is at the beginning of its cycle and usually starts with development, then intellectual property protection, such as the obtainment of trademarks and patents.
The goal in this stage is to build market share and many times the price is higher now than it will be in later stages due to increased production and development costs in relation to low sales. Distribution is usually limited until there is an increase in market share. Promotional efforts seek to create demand through education of consumers and the building of product awareness; oftentimes they are experimental to test the waters via consumer feedback. Such efforts are aimed at innovators in the industry to which the product belongs.
There is little, or no, competition at this stage.The Wii Fit game would be considered a product in the introduction stage. This innovative product has only been available to consumers for several weeks and there is nothing else on the market like it – virtually no competition. The price for this game, at $89. 99, is relatively high when compared to other games or other console systems, such as Xbox 360 or Playstation 3 games which tend to run around $50 - $60.
Nintendo used a marketing strategy of promoting this game as a fitness program which anyone can use to tone up and slim down.The target market is parents of sedentary children who show interest in little other than video games and adults who wish to get into shape in the privacy of their own home. There are currently no promotional devices in place for the Wii Fit, since it is a new product without competition and has already experienced good demand. Growth After the introduction of a product, the next stage, growth, focuses on increasing market share and creating brand preference. Oftentimes, new features are added to the product and support services for users are touted.Increasing demand for the product means that pricing levels generally stay the same or are lowered due to the increase in sales volume.
The production company begins to see a profit while distribution channels are added to meet increased sales. Marketing efforts begin to reach out to a broader consumer base and respond to competition. The smart car is clearly in the growth stage in the United States market. Its introduction to this country occurred earlier in the year, when it was offered for the first time, with an overwhelming response from the target market of young professionals, commuters, recent graduates, and empty-nesters.The smart car received new features specifically aimed at the American consumer and distribution channels were added in the way of auto dealerships, the number of which carry smart cars gradually increasing.
The marketing strategies which were put into place included an appeal to green consumers and budget-conscious drivers. This has worked extremely well, largely due to the subsequent hefty increase in gas prices. One promotional device used was the offer to accept a very minimal down payment from consumers, which was refundable, as they waited for their car to be produced and available in a showroom.The smart car’s competitors, such as Nissan, Toyota, and Honda could not offer this incentive nor do they offer the same “cuteness” factor of this tiny automobile. Maturity At maturity, a product sees peak sales figures as production costs lessen.
Additional competitors may have entered the market by this time, taking away hard-earned market share. In order to compete, the product may be improved with the addition of features to differentiate the company’s offering and/or the price lowered. Distribution is widened and sometimes incentives are offered to buyers to maintain loyalty for the product.Marketing promotion often emphasizes the unique features, company strength, or history in order to entice new buyers as well as keep the established market base. The Apple iPod is an example of a product in its mature phase of the life cycle. When it was first introduced years ago, the high price and lack of competition required it to develop its own customer base.
Now, new MP3 players are emerging constantly, with lower prices and wider availability of downloads. Apple has since introduced the Nano, a smaller version at a lower price, while new features continue to be added to all models in order to compete.Apple is now targeting business professionals in addition to the younger generation, the original target market who was more interested in song downloads, by advertising an iPod as a way to stay connected through newscasts, Email functions, and more, all in one device. The iPod is even being discounted now at many major retailers, such as Best Buy, in direct response to the competitors’ lower pricing. Apple has done a great job of extending the product life of iPods by diversifying its offerings and developing new uses for it. Decline Finally, in a product’s last stage, it begins to decline due to lack of sales versus cost of production.
There are generally three alternatives at this point. Some companies prefer to push new uses for the product or add updated features to breathe new life into sales. An alternative is to harvest the product whereby it is kept available in a limited distribution base for loyal customers. Thirdly, the company may decide to discontinue its production and sell off any remaining inventory to cut further losses. New marketing efforts are only warranted if the first option is chosen. Pricing levels may increase if production continues but will most certainly decrease if inventory is liquidated.
A product which is in its decline stage is the television set which still employs tube technology. Some years ago, this was the only choice when buying a television. In the past decade or so, however, new technology has been developed which allows TV sets to be flat panel and rear or front projection. These sets have larger screens and take up less room, making those with tubes nearly obsolete.
Most manufacturers of tube TVs have harvested their products; they are still available but in a very limited distribution at a low price, since the production technique is cost effective but outdated.Often, there are deals on these TVs at the distributors which still carry them because as inventory, they are dead weight. In addition, production of analog television sets has been discontinued due to the recent governmental ruling that all transmissions must be in digital format by the beginning of next year. The only target market left for these sets is the very price-conscious consumer.
No amount of rebranding, repositioning, or addition of features will boost sales. Clearly, TVs which are big, bulky, or analog are past their prime and in a state of decline.
