What Marketing Strategies Are Appropriate at Each Stage of Product Life Cycle
Because economic conditions change and competitive activity varies, companies normally must reformulate their marketing strategy several times during a product’s life cycle. Technologies, product forms, and brands also exhibit life cycles with distinct stages. The life cycle stages are usually introduction, growth, maturity, and decline. Most products today are in the maturity stage. Each product life cycle stage calls for different marketing strategies. The introduction is marked by slow growth and minimal profits. If successful, the product enters a growth stage marked by rapid sales growth and increasing profits. There follows a maturity stage in which sales growth slows and profits stabilize. Finally, the product enters a decline stage. The company’s task is to identify the truly weak products, develop a strategy for each, and phase them out in a way that minimizes impact on company profits, employees, and customers. Like products, markets evolve through four stages: emergence, growth, maturity, and decline.
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What Marketing Strategies Are Appropriate at Each Stage of Product Life Cycle
- 1. WHAT MARKETING STRATEGIES ARE APPROPRIATE AT EACH STAGE OF THE PRODUCT LIFE CYCLE?
- 2. INTRODUCTION STAGE 1. INDUCE PRODUCT TRIAL • Gmail came up with its new email app, INBOX • It was initially marketed through an INVITE- ONLYmodel
- 3. INTRODUCTION STAGE 1. INDUCE PRODUCT TRIAL • Uber and other taxi aggregators promote a referral program, which helps both the referrer and referee to earn FREE RIDES • Also helps in increasing customer base organically
- 4. INTRODUCTION STAGE 1. INDUCE PRODUCT TRIAL LAUNCH BETA VERSIONS • Launching Beta versions help in testing the market and the product • Popular online youth entertainment network, The Viral Fever has ventured into 2 new product domains which are in their Beta phase: a) TVF PLAY, a premium content hosting/ creating portal b) TVF INBOX OFFICE, an on demand online movie streaming portal
- 5. INTRODUCTION STAGE 2. INFORM POTENTIAL CUSTOMERS Make PUBLIC ANNOUNCEMENTS Reliance Jio in testing phase Reliance Jio is present in 29 states Reliance Jio laid 250,000 km of fibre optics Jio to double fibre optic network in 1 year
- 6. INTRODUCTION STAGE 2. INFORM POTENTIAL CUSTOMERS Create a HYPE • With the launch of every new Apple product, rumors start floating • User-Generated ‘leaked photos’ create a buzz • From the release date, to the product features, everything is anticipated
- 7. INTRODUCTION STAGE 2. INFORM POTENTIAL CUSTOMERS Launch CONCEPT MODEL • DC Design launched India’s first home manufactured super-car concept in 2012 • After gaining positive response from the public, it is now in its production stage
- 8. INTRODUCTION STAGE BE A PIONEER OF THE INDUSTRY • Pioneers create a market • They get the FIRST MOVER ADVANTAGE • They can penetrate the market by the time a competitor comes and imitates them
- 9. GROWTH STAGE IMPROVE EXISTING PRODUCT Brands improve product quality, add new features and improve styling and aesthetics
- 10. GROWTH STAGE ADD NEW MODELS, CATEGORIES, VARIANTS TO THE PARENT BRAND
- 11. GROWTH STAGE INCREASE DISTRIBUTION COVERAGE • India is the only country where Domino’s is double the size of McDonald’s • The primary reason why Domino’s is the market leader in India is because of its extensive coverage • It has more than 818 stores across 173 cities, while McDonald’s has less than 400 stores in the country • It plans to touch 2,000 stores by 2020
- 12. GROWTH STAGE LOWER PRICES TO ATTRACT NEXT LAYER OF PRICE SENSITIVE BUYERS
- 14. MATURITY STAGE PRODUCT MODIFICATION • YepMe.com initially worked on the horizontal ecommerce model, where they sold multiple brands. • They changed their product strategy and transformed themselves as a single private label brand.
- 15. MATURITY STAGE MARKET MODIFICATION • Pretty Secrets was launched as a night wear & lingerie brand available across 250 offline stores • Since, the market was predominantly controlled by unorganized retail, the brand went digital and discontinued it brick & mortar operations
- 16. MATURITY STAGE MARKETING PROGRAM MODIFICATION • Frooti went through a rebranding exercise this year, making the new logo appear more bold & strong. • REASON: Frooti wanted to reposition itself from a children centric brand to a youth centric brand.
- 17. DECLINE STAGE THE GREAT FALL OF SOME BRANDS
- 20. CREATED BY: YASHOVARDHAN GANERIWALA [NARSEE MONJEE COLLEGE OF COMMERCE & ECONOMICS] DURING AN INTERNSHIP UNDER: PROF. SAMEER MATHUR, IIM LUCKNOW