We spoke about how marketing works and what it actually is and also discussed the 4 important P’s of marketing which are essential for building a successful marketing strategy. Now, let us look at how one of the 4 P’s, Product is used in the marketing process.
The product life cycle shows us how a product progresses in the market. Any new product goes through the stages of-introduction, growth, maturity and finally decline. Even though the stages remain the same for all products, the time taken for getting through each phase depends on the market situation and the response garnered as per the popularity of the product.
Before any product is launched into the market, a considerable amount of brainstorming goes into the research and development section. Here, the company gauges the need for the product and identifies a target customer base. For example, apparels like torn jeans appeal to the younger generation, and therefore to garner the attention of the specific target group of customers, i.e., the youth, it is important to include strategies where role models or icons of youth are used to advertise the clothing such that young adults are influenced into buying it. This banks on the need for people to try new fads so as to be “fashionable”. Similarly, cooking utensils such as pressure cookers are usually used by adults running a household and therefore, adults are featured in the advertisements so as to to attract the right group of people.
Therefore, it can be said that the research and development phase is the first and foremost to be considered whenever a product is to be launched.
Next, we have the introduction phase. As it suggests, this phase is about launching the product into the market. The seller tries to stimulate demand. It is required to carry out promotion campaigns to increase public awareness. It is important to highlight the features, advantages and benefits of the product. This stage is where you lose money, but profits can be expected in the future. Sales are low, and profits are below the line because your costs are greater than the amount of money you make-you have “negative” profit. There is also a need to spend a lot of money on promotion.
After introduction, we have growth. During this phase, the sales are expected to increase at their fastest rate. A lot is sold – The seller tries to sell as much as possible. Other competitor companies watch, and decide about joining in with a competitor product. As it is said, “success breeds imitation”. The growth phase will continue until too many competitors get involved in the marketing of similar products. This is when the market is said to be saturated. At the end of the growth stage, profits start to decline when competition means you have to spend more money on promotion to keep sales going-spending money on promotion cuts into your profit.
At the stage of maturity, the products sells but is fast approaching saturation. Many competitors would have joined the market, leading to saturation. The only way to sell is to begin to lower the price – and profits decrease. It is difficult to tell the different between products since most have the same F.A.B. – Features, Advantages & Benefits. Competition can get nasty and commercials are intense. Persuasive Promotion becomes more important during this stage, that is to say, you have commercials almost begging the customer to still buy your product because you still make it just as good.
The last stage-that of decline, is when the sales begin to fall. Newer products are now more attractive – even a low low price does not make consumers want to buy. Profit margin declines and so the only way to make money is to sell a high volume. To increase volume you try to- Increase the number of customers – get new customers, or increase the amount each customer uses.
It is important to try and prolong the growth and maturity phases to garner more profit and this can be done by various methods, most important of which is advertising.
For any product’s life cycle, it is important to keep a track on all that is going on. The transactions, the work done and so on. This is where a software tool like VComply comes to use which tracks all your organizational activities and keep everything on schedule and on track. It also helps you with the necessary certifications and licenses needed, which can and may pertain to a certain product.
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