Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

10. Product Management
    and New−Product
    Development

Text © The McGraw−Hill

Companies, 2002

Product Management and New-Product Development 283

A fadis an idea that is fashionable only to certain groups who are enthusiastic

about it. But these groups are so fickle that a fad is even more short lived than a

regular fashion. Many toys—whether it’s a Hasbro Planet of the Apes plastic figure

or a Toymax Paintball pack—are fads but do well during a short-lived cycle. Some

teenagers’ music tastes are fads.^9

Planning for Different Stages of the Product Life Cycle

Where a product is in its life cycle—and how fast it’s moving to the next stage—

should affect marketing strategy planning. Marketing managers must make realistic

plans for the later stages. Exhibit 10-2 shows the relationship of the product life

cycle to the marketing mix variables. The technical terms in this figure are discussed

later in the book.

Exhibit 10-2 shows that a marketing manager has to do a lot of work to intro-

duce a really new product—and this should be reflected in the strategy planning.

Money must be spent designing and developing the new product. Even if the prod-

uct is unique, this doesn’t mean that everyone will immediately come running to

Length of cycle afects

strategy planning

Introducing new

products

Market

introduction

Market

growth

Market

maturity

Sales

decline

Total industry

sales

Total industry

profit

Time

$ 0

+

Competitive

situation

Product

Place

Promotion

Price

Monopoly or

monopolistic

competition

One or few

Build channels

Maybe selective distribution

Build primary

demand

Pioneering-

informing

Skimming or

penetration

Monopolistic

competition or

oligopoly

Variety—try

to find best

product

Build brand

familiarity

Build selective demand

Informing/Persuading Persuading/Reminding

(frantically competitive)

Meet competition (especially in oligopoly)

or

Price dealing and price cutting

Monopolistic

competition or

oligopoly

heading toward

pure competition

All “same”

Battle of brands

Move toward more

intensive distribution

Some drop out

Exhibit 10-2

Typical Changes in

Marketing Variables over the

Product Life Cycle