Marketing strategies

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2. Product life cycle is the course of a products sales and profits over time. Product life cycle(PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures 3. When we say that a product has a life cycle we assert fourthings: Products have a limited life. Products sales pass through distinct stages, each posingdifferent challenges, opportunities and problems to theseller. Profits rise and fall at different stages of the product lifecycle. Products require different marketing, financial,manufacturing, purchasing, and human resource strategiesin each life cycle stages. 4. Product Life-CycleSales andProfitsTimeProduct Introduction Growth Maturity DeclineDevelop-ment 5. Type of product Level of competition Marketing support of the product Customer taste 6. Promotion High Low Rapid-Slow-High skimmingskimmingstrategystrategyPrice Rapid- Slow-Lowpenetrationpenetrationstrategy strategy 7. The costs are very high low sales volumes to start Little or no competition Demand has to be created Customers have to be prompted to try the product 8. The need for immediate profit is not a pressure. The product is promoted to create awareness Heavy expenditures to create trial for Sales Promotion 9. Introduction Stage of the PLCLow salesSalesCosts High cost per customer Profits Negative Marketing ObjectivesCreate product awarenessand trial Product Offer a basic product Price Use cost-plus Distribution Build selective distributionBuild product awareness among early Advertisingadopters and dealers 10. costs reduced due to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players inestablishing market increased competition leads to price decreases Sales Promotion Reduce expenditures to takeadvantage of consumer demand 11. Improves product quality and adds new features and improved styling. Adds new models and flanker products(i.e., products of different sizes, flavors, and so forth that protect the main product). It enters new market segments It increases its distribution coverage and enters new distribution channels. It shifts from product- awareness advertising to product- preference advertising. It lowers price to attract the next layer of price sensitive buyers. 12. Growth Stage of the PLC Sales Rapidly rising salesCostsAverage cost per customerProfits Rising profits Marketing Objectives Maximize market share ProductOffer product extensions, service, warranty PricePrice to penetrate market Distribution Build intensive distribution AdvertisingBuild awareness and interest in the massmarket 13. costs are lowered as a result of production volumesincreasing and experience curve effects sales volume peaks and market saturation isreached increase in competitors entering the market prices tend to drop due to the proliferation ofcompeting products brand differentiation and feature diversification isemphasized to maintain or increase market share Industrial profits go down 14. Profits continue to grow and stay positive throughoutCompetition is most intense at this stage; many versions and brandsStrategies to prolong this stage: Modify the market Modify the product Modify the marketing mix 15. Three potentially useful ways to change the course for a brand are market, product, and marketing program modification.Product modificationTrying to stimulate sales by modifying theproducts characteristics through1.Quality improvementEg: Aashirvaad, Annapurna,Nature fresh2. Feature improvement Eg: Pulsar 180 to Pulsar 2203. Style improvement Eg; New car models, New Coke 16. Maturity Stage of the PLCSales Peak salesCosts Low cost per customer Profits High profitsMarketing Objectives Maximize profit while defendingmarket share Product Diversify brand and modelsPrice to match or best competitors Price Build more intensive distributionDistributionAdvertisingStress brand differences and benefits 17. costs become counter-optimal sales volume decline or stabilize prices, profitability diminish Sales of the new product drop quickly as the target market(s) move on to other things Profits decline as competitive pressures force lower prices and set promotional spending at a level that maintains the share 18. Decisions about the product Maintain spending levels to fight it out for what is left Harvest by cutting spending and riding it out. Drop the product and move on to the next thing 19. Eg.5.25 Floppy disk 20. Decline Stage of the PLC SalesDeclining sales CostsLow cost per customerProfitsDeclining profits Marketing Objectives Reduce expenditure and milk the brand Product Phase out weak items Price Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers 21. INTRODUCTION GROWTH MATURITY DECLINE10-26 22. Marketing management Philip Kotler Kevin KellerAbraham KoshyMithileshwar Jha 23. THANK YOU !!!