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describes the stages a new product goes through in the marketplace: introduction, growth, maturity, decline

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product life cycle

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Occurs when a product is introduced to its intended target market. during this period sales grow slowly+profit is minimal. * marketing objective is to create consumer awareness and stimulate trial- the initial purchase of a product by a consumer. * pricing can either be high or low during this stage. A high initial price may be used for a skimming strategy. a low price could be used for penetration pricing.

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Introduction Stage

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the desire for the product class rather than for a specific brand, since there are few competitors with the same product

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primary demand

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the preference for a specific brand

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Selective demand

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characterized by rapid increases in sales. * this is where competitors and more aggressive pricing is that profit usually peaks during the growth stage * advertising shifts emphasis to stimulating selective demand *changes appear in the product in this stage

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Growth Stage

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Characterized by slowing of total industry sales or product class revenue *Marginal competitors begin to leave the market * sales increase at a decreasing rate +few new buyers enter the market * cost of gaining new buyers rises

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Maturity Stage

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When sales drop * company will either follow deletion or harvesting

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Decline Stage

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dropping the product from the company product line, the most drastic strategy

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Deletion

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when a company retains the product but reduces marketing costs. product continues to be offered, but sales people do not allocate time in selling nor are advertising dollars spent. purpose is to maintain the ability to meet customer requests

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Harvesting

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1) the length 2) the shape of sales curve 3) how they vary with different levels of products 4) the rate at which consumers adopt products

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Four Aspects of the Product Lice Cycle

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there is no set time that it takes a product to move through its life cycle. depending on how long the introduction stage is this could cause you to change the way you market the product

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1) Length of the product life cycle

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several life cycle curves: high learning, low learning, fashion, and fad products

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2) Shape of the product life cycle

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is one where a significant customer education is required and there is an extended introductory period

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High-learning product

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product is one where there is little learning required and the benefits are readily understood.

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Low-learning

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one where they are introduced, declined, and seem to return.

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Fashion product

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one where is experiences rapid sales on introduction and then an equally rapid decline. Ex. Car tattoos

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Fad product

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check w/word doc

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Draw the product life cycle of each of the 4 curves

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product class: refers to the entire product category or industry pre. recorded music product form: variations within the product class ex. technology used to provide the music such as cassette tapes

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3)How the life cycles vary with different levels of products: product class vs form

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the life cycle of a product depends on sales to consumers. there are several factors the affect whether a consumer will adopt a new product or not: - Usage barriers: the product is not compatible with existing habits - Value barriers: the product provides no incentive to change - Risk barriers: physical, economic or social - Psychological barriers: cultural differences or image.

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4) The rate at which consumers adopt products: barriers

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innovators, early adopters, early majority, late majority, and laggards.

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5 categories and profiles of product adopters

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the first ones. venturesome, higher educated, use multiple information sources. in introduction stage

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Innovators

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the next people after innovators. leaders in social setting; slightly above average education. in introduction stage

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Early adopters

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after early adopters. deliberate; many informal social contacts. in the growth stage

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Early Majority

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after early majority. Skeptical; below average social status. in the maturity stage

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Late Majority

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after late majority. fear of debt; neighbors and friends are information sources. in the depletion/harvesting stage. these people won't hear any advertisement

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Laggards

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invovles altering one or more of a products characteristics: quality, performance, appearance. to increase the products value to customers and increase sales

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product modification

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when a company tries to find new customers, increase a products use among existing customers or create new situations

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market modification

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changes the place a product occupies in a consumers mind relative to competitive products. does this by changing one or more of the 4 marketing mix elements

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repositioning the product

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reducing a products number of features, quality, or price. ex airlines reduces legroom to add more chairs

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trading down

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an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors

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Branding

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any word, device, or combination of these used to distinguish a sellers products/services

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brand name

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commercial, legal name under which a company does business

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trade name

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identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others from using it.

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trademark

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a set of human characteristics associated with a brand name

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brand personality

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the added value a brand name gives to a product beyond the functional benefits provided

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brand equity

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1. Develop positive brand awareness and an association of the brand in consumer's minds with a product class or need to give the brand identity 2. A marketer must establish a brands meaning in the minds of consumers. 3. Elicit the proper consumer responses to a brands identity and meaning. 4. Create a consumer-brand connection evident in an intense, active loyalty relationship between consumers and the brand.

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how to create brand equity

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1. multiproduct branding strategy 2. multi branding strategy 3. private branding strategy 4. mixed branding strategy

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Branding Strategies

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uses one name for all its products in a product class. examples * toro makes snow blowers, lawn mower, hoses, sprinklers * campbell soup company has different soups - Advantages: consumers who have a good experience with the product will transger this favorable attitude to other items with the same name. makes possible product line extensions (the practice of using a current brand name to enter a new market segment in its product class), can lower ads and promotion costs because the same name is used on all products, raising the level of brand awareness.

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Multiproduct branding strategy

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involves giving each product a distinct name examples * P&G makes tide, cheer, ivory snow, bold useful when each brand is intended for a different market segment. it lets you target each market market separately.

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Multibranding Strategy

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also called private labeling or reseller branding, when it manufactures products but sells them under the brand name of a wholesaler or retailer. example * sears sells: kenmore, craftsman, diehard batteries

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Private branding strategy

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a firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from its own market. example * michelin makes its own tires and also makes sears tires.

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Mixed Branding strategy

Chapter 11: Charting the Product Life Cycle – Flashcards

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