MarketingManagement.pdf

172 CHAPTER9POSITIONINGPRODUCTSTHROUGH THELIFECYCLE

Introduction Growth Maturity Decline

Characteristics

Sales Low sales Rapidly rising sales Peak sales Declining sales

Costs High cost per Average cost Low cost Low cost

customer per customer per customer per customer

Profits Negative Rising profits High profits Declining profits

Customers Innovators Early adopters Middle majority Laggards

Competitors Few Growing number Stable number Declining number

beginning to decline

Marketing Objectives

Create product Maximize market Maximize profit Reduce

awareness and trial share while defending expenditure and

market share milk the brand

Strategies

Product Offer a basic Offer product Diversify brands Phase out weak

product extensions, service, and items models

warranty

Price Charge cost-plus Price to penetrate Price to match or Cut price

market best competitors’

Distribution Build selective Build intensive Build more Go selective:

distribution distribution intensive phase out

distribution unprofitable

outlets

Advertising Build product Build awareness Stress brand Reduce to level

awareness among and interest in differences and needed to retain

early adopters and the mass market benefits hard-core loyals

dealers

Sales Promotion Use heavy sales Reduce to take Increase to Reduce to

promotion to advantage of heavy encourage brand minimal level

entice trial consumer demand switching

Sources:Chester R.Wasson,Dynamic Competitive and Product Life Cycles(Austin,TX: Austin Press, 1978); John A.Weber,
“Planning Corporate Growth with Inverted Product Life Cycles,”Long Range Planning,October 1976, pp. 12–29; and
Peter Doyle,“The Realities of the Product Life Cycle,”Quarterly Review of Marketing,Summer 1976.

Table 3.7 Summary of Product Life Cycle Characteristics, Objectives, and Strategies

delays in the expansion of production capacity, technical problems (“working out the

bugs”), delays in obtaining adequate distribution through retail outlets, and customer

reluctance to change established behaviors.^21 Sales of expensive new products are

retarded by additional factors such as product complexity and fewer buyers.

Profits are negative or low in the introduction stage because of low sales and

heavy distribution and promotion expenses. Much money is needed to attract distrib-