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

278 Chapter 10

Persuasive promotion becomes more important during the market maturity stage.

Products may differ only slightly if at all. Most competitors have discovered the most

effective appeals or quickly copied the leaders. Although each firm may still have

its own demand curve, the curves become increasingly elastic as the various prod-

ucts become almost the same in the minds of potential consumers. By then, price

sensitivity is a real factor.

In the United States, the markets for most cars, boats, television sets, and many

household appliances are in market maturity. This stage may continue for many

years—until a basically new product idea comes along—even though individual

brands or models come and go. For example, high-definition digital TV (HDTV) is

coming on now, and over time it will make obsolete not only the old-style TVs but

also the broadcast systems on which they rely.^3

During the sales declinestage, new products replace the old. Price competition

from dying products becomes more vigorous—but firms with strong brands may

make profits until the end. These firms have down-sloping demand curves because

they successfully differentiated their products.

As the new products go through their introduction stage, the old ones may keep

some sales by appealing to the most loyal customers or those who are slow to try new

ideas. These conservative buyers might switch later—smoothing the sales decline.

Sales decline—a time
of replacement

Individual brands may
not follow the pattern

Product Life Cycles Should Be Related to Specific Markets

Remember that product life cycles describe industry sales and profits for a product

ideawithin a particular product-market. The sales and profits of an individual prod-

uct or brand may not, and often do not, follow the life-cycle pattern. They may vary

up and down throughout the life cycle—sometimes moving in the opposite direc-

tion of industry sales and profits. Further, a product idea may be in a different

life-cycle stage in different markets.

A given firm may introduce or withdraw a specific product during any stage of

the product life cycle. A “me-too” brand introduced during the market growth stage,

A new product, like equipment
for video conferencing over the
Internet, is likely to get to the
market growth stage of the
product life cycle more quickly if
customers see it as being easy
to use.