Posted at 12.10.2018
Under the current competitive marketing environment, how to control a good marketing strategy for a certain product is quite vital for an enterprise's survival and development. Product is the most essential part in the marketing combination. Life routine for something is another most important factor that ought to be identified by an venture correctly. To comprehend product life pattern is vital for marketers when they are planning the marketing strategies for its product. Therefore, as far as the product life cycle is concerned, this essay will first illustrate a comprehensive strategy about the merchandise life cycle. Third, , it will review the precise marketing strategies which will be referred by marketers in the marketing process.
Just like the rest, product has its life cycle too. The theory of product life circuit (PLC) was firstly brought ahead and designed by Teacher Raymond Vernon of Harvard School in 1966 (Jain and Vachani, 2006). PLC refers to a period when a product starts with its initial stage (R&D) and ends using its removal from the marketplace. A typical PLC includes four stages: introduction, progress, maturity and decrease. See the body below.
Figure 1: Product life cycle
1. Introduction Stage
Introduction stage refers to the testing amount of a product releasing into the marketplace. Once a fresh product enters into the market, it starts the introduction stage. At this time, the number of the products in the market is small and customers are totally unfamiliar with the product. Except some customers chasing new things, nobody else will most likely buy the product.
2. Progress stage
When the merchandise launches in the release phase with a success of take-off in sales, the merchandise develops into growth stage. Growth level refers to the product has exceeded the marketing test with a good sales effect and consumers slowly but surely accept and recognize the merchandise and the merchandise has achieved its standing ground available on the market (Hines, Francis and Found, 2006). In this particular period the demand and sales of the product are growing speedily. Company will have a significant cost reduction in the make and gain more income. Meanwhile, other opponents may establish the similar products into the market by viewing the profitable market in the product.
3. Maturity stage
At this level, the merchandise is in the stage of mass creation and is being able to access to the market steadily. The marketplace demand for the product has been standardized and the syndication of the product is well established. At this time, the merchandise is produced at low priced (Swiercz and Lydon, 2002). The swift development of sales will decelerate or even decrease to some extent. Because of the intense competition environment, the firms have to add the product's value by bettering the product quality, or modifying the associated features like its appearance, standards, product packaging and services etc.
4. Decrease stage
Decline means the product is becoming outdated. As the technology development and change of eating habit, profits of the merchandise are declining. The product can not meet the customer's demand and new products with better performance and lower price appear in the marketplace which can satisfy the consumer's needs well. At the moment, the product with higher development cost will slowly but surely stop processing as no revenue from the marketplace. Therefore, it's the time for the product to end its life pattern and withdraw from the marketplace completely.
Product life circuit is a very important concept for professional as it is immediately connected with the marketing approaches for the merchandise (Avlonitis and Papastathopoulou, 2006). In various PLC periods, marketers should consider to apply different marketing strategies.
In introduction stage, the company should highly focus on building product consciousness and cover the market share rapidly as there exists less problem from competitors. Organizations should consider applying large costs on campaign and advertising and become prepared to get only a little proportion of this back. Costing is also important for company to determine in the phase. Company can set up a high price for recovering the development costs or low penetration price to create its market talk about quickly.
In growth level, the essential guiding concept for the marketing is to broaden the market and cover the marketplace share maximum. Its target is to keep up its competitive status while extending market speedily. The marketing strategies in this stage should vary from that in the introductory stage. Company must identify its products offerings from the opponents'. Campaign and advertising is constantly on the aim in establishing a control in this market. This era is also the optimum time to make a standard coverage strategy in every marketplaces to be able to reach to more consumers.
At maturity period, the increasingly growth in sales is diminishing. The competition in the marketplace with appearance of several other replaceable new brands is getting intense ever before (Sharma, 2009). At this time, the marketing strategy's target is to guard the market talk about as best as it could do. Various marketing tools are applied, such as costing and discount guidelines as giving an answer to your competition environment. Advertising and advertising should highlight product differentiation in conditions of quality and consistency. Distribution proceeds multi-distributing channels. Successful product maturity level is expanded beyond the standard expectation. "Tide" washing powder is an excellent example. It really is a very old brand, but nonetheless growing.
At decline level, the sales proceeds decreasing and prices strategies like discount, is not effective. Therefore, organizations should make options for handling the product effectively. If company decide to keep up with the product, three marketing strategies may be helpful (Ferrell and Hartline, 2008). (1). Continuance of the prior marketing strategies regarding price, market, circulation and promotion. (2). Concentrate on the most potential marketing programs. (3). Harvesting strategy. It means to lessen price greatly and advertising personnel or keep up with the original price or even greater than before to maximize profits before drawback from the marketplace.
In summary, product life cycle is a very important concept in a organization. In order to make a product survive on the market so long as possible, it is very essential for the marketers to comprehend the product life cycle in order to provide/design effective marketing strategies for every single period of PLC. An effective management of PLC will most likely increase its life and gain growth in the competitive market.