Increasing Market Share A successful marketing plan can guarantee improvements in the market share. In the growth stage, the firm faces a trade-off between high market share and high current profit. Advertising or Promotion in the introduction stage will focus on creating awareness among dealers as well as innovators. Market Modification : This strategy is aimed at increasing sales by raising the number of brand users and the usage rate per user. Companies may decide to lower product prices to maintain market share for as long as possible. It should realize that the initial strategy is just the first step in a grander marketing plan for the product's entire life cycle.
It can improve the product's styling and attractiveness. However, once the sales of a product start to fall or profitability can no further be maintained, the decline stage is reached. All products and services have a certain life span which is measured by the chronological history of sales from the launch of the product until its withdrawal from the market. The firm can also enter new market segments and new distribution channels with the product. Therefore, the introduction stage starts when the product is first launched. The manager also looks for ways to increase usage among present customers.
This does not necessarily mean that education is in decline, only that it is in a down cycle. Marketing Strategies for Decline Stage : Company formulates various strategies to manage the decline stage. They also help you identify ways to maximize productivity and cut marginal costs. The company tries to strengthen competitive position in the market. Furthermore, profits in the introduction stage are negative or low due to the low sales on the one hand and high-distribution and promotion expenses on the other hand.
Stop production gradually to divert resources to other products iii. In the following, all characteristics of the four product life cycle stages discussed are listed. The firm uses several strategies to sustain rapid market growth as long as possible. Price Different pricing strategies executed during the introductory stage are revised. This point is known as the shake-out point. To succeed, companies use additional promotional and distribution resources to squeeze enough profits from the stable markets they enjoy. Two pricing strategies are available.
They advertise through various media channels, tools and platforms, including social networking websites, video-sharing websites and blogs, all of which can effectively help companies reach the desired target market. This increases the sales of the sales. The increase in competitors leads to an increase in the number of distribution outlets, and sales jump just to build reseller inventories. It might improve the product's quality and performance—its durability, reliability, speed, taste. The problem at this stage is heavy price competition and resulting increased marketing expenditure from all competitors in order to retain brand loyalty.
Technological obsolescence, change in customer tastes, market demand saturation, or introduction of a new better substitute etc. These strategies are discussed in more detail here. The purpose is the faster market penetration to get larger market share. Cost-plus pricing should be used to recover the costs incurred. The slowdown in sales growth results in many producers with many products to sell.
One option is to revisit your pricing strategy. Products generally go through a life cycle with predictable sales and profits. In the growth stage, the firm must choose between a high market share and high current profits. Several possible strategies for the stage are as under: 1. These objectives help marketers take proactive steps rather than launch reactive measures to deal with market pressures. The growth stage is a good example to demonstrate how product life cycle strategies are interrelated.
Profits also improve as the company gets a benefit of economies of scale with the rise in customer demand. The defining characteristic of each stage is the amount of revenue that can be generated during the cycle. You can read more about the alternative pricing strategies. Although these products have changes only very little since their launch, they are still highly successful or even more successful than ever. This objective can be achieved by use of promotional strategies geared toward customer loyalty among the existing users. In this case, primary demand will first have to be established.
They now spend more resources on increasing and brand preference. Reducing price at the right time to attract price-sensitive consumers 7. Increased Competition: The increased popularity of the brand results in an increase in the competition in the market. New and more varied uses of product 3. Products pass through several distinct stages, and the objectives change as products move through each of these phases. They need to be informed and convinced.