In the Growth Stage of the product life cycle the market is aware of the product you have introduced. Now sales have the potential to significantly increase and profitability will begin to rise. This is the result of economies of scale – the reduction in cost per unit resulting from increased production, realized through operational efficiencies.
Product Life Cycle- Growth
Your advertising and distribution channels have paid off! More consumers are aware of your product in the market and competition is on the rise. Other manufacturers will think of a product that will compete with yours and this will result in a price decrease.
Lipstick with Sunscreen
Picture this, say you came up with a lipstick that is both a moisturizer and a sunscreen that changes color when you change body temperature – when you feel hot your lips will turn hot red and if you feel chilly it turns into neutral pink. You gave samples at Target, WalMart and other stores for customers to try. Anita Wantaproduct, editor-in-chief of American Fashion picked your product as the new “IT” thing of the season.
Because of the feature article in American Fashion, people will become aware about the lipstick and everybody (well at least the women) will want to have one or two for each purse. Lancome and Maybelline came out with a similar lipstick but in a different shade. This may prompt you to reduce your price from the original $10 each to $8.95.
What do you think will happen next? Will it continue to rise and be an item in every woman’s purse? Or will it be just another ordinary lipstick?
Grow Your Sales,
p.s. I don’t think they should directly compete with the other products and lower their price, but that can be discussed later.
In the Introduction Stage of the product life cycle, you can expect that the cost of creating and advertising a product will be high; sales and profit will be low. Also in this stage, other manufacturers will wait and see if the product being introduced in the market will create demand that will ensure profit.
Product Life Cycle- Introduction
For product awareness to pick up, the manufacturer should advertise the product using print, video and audio advertising, along with multiple channels of distribution. They can also spread the word by giving out samples of the products (think of sample booths at Costco or Sam’s Club).
Also non-traditional methods of spreading the marketing message like social media (online videos, social bookmarks, community posting and many other ways) are more ways to help create product awareness. This is a crucial stage in the products “life” it can become the next Cherry Coke or will be discontinued like Pepsi Blue. Both shown below with comments:
Pepsi Blue was launched in the mid2002 and discontinued in 2004. Even with the heavy publicity by Britney Spears and the bands SEV and Papa Roach, it failed to be a household mainstay.
Cherry Coke on the other hand, is the first flavored Coke introduced by Pink Floyd to a test audience at the 1982 World’s Fair. Cherry Coke is available in most of Europe, New Zealand and Japan.
Introduce Your Product,
I was fighting it for awhile and then decided to give in! What good can Twitter do for you? For one thing it can bring you links to your blog, which brings in more visitors. It can also get your name out to more people: repeat views brings familiarity and can help with low level relationship building and trust.
So I took the plunge, if you Twitter add me as a friend with the button below or from the side bar of this blog:
Twitter Follow Me
Then send me your 140 characters of welcome.
Have you ever wondered how a product is created? Can you think of a product that was a big hit back in the day but not available now? Some say that a product has a life cycle like Mother Nature. A bird drops a seed on the ground; the seed starts to sprout; shoots out leaves and roots; the plant matures into a big tree and after years of stormy weather and sunny spring the tree dies.
In theory, it’s the same for a product. After a period of development, it is introduced or launched into the market (bird drops the seed on the ground); it gains more and more customers as it grows (shoots out leaves and roots); eventually the market stabilizes and the product becomes mature (little seed became a big tree); then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn (death of tree).
Product Life Cycle
To say that a product has a life cycle is to assert four things:
- That products have a limited life,
- product sales pass through distinct stages, each facing different challenges, opportunities, and problems to the seller,
- profit rise and fall at different stages of product life cycle, and
- products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.
However, you must remember that a product life cycle even under normal conditions, to all practical intents and purposes often do not exist. Dhalla & Yuspeh in 1976 criticizes the product life cycles states that:
…clearly, the PLC (Product Life Cycle) is a dependent variable which is determined by market actions; it is not an independent variable to which companies should adapt their marketing programs. Marketing management itself can alter the shape and duration of a brand’s life cycle.
So, the life cycle may be useful as a description, but not as a PREDICTOR; and usually should be firmly under the control of the marketer. The important point is that in many markets, that product or brand life cycle is significantly longer than the planning cycle of the organizations involved.
For more about the product life cycle visit: http://www.samcarrara.com/marketing/product-life-cycle-overview/
The Product Journey,
Last night after a quick trip to the local mall, I took my family to Mimi’s Cafe
. It is a restaurant that serves breakfast, lunch and dinner and the first one opened in 1978. The buildings are themed like colorful French cottages. Inside the restaurant is nothing like other restaurants, you will have visit to see what I mean.
We have enjoyed eating at Mimi’s before but this visit was different for a few reasons:
- They had a great appetizer, meal and dessert choice menu that was only $12.99, I ordered the corn chowder, half rack of ribs and brownie sundae. My wife ordered the garden salad, BBQ salmon and apple crisp sundae. Both meals were delicious.
- The wait staff and managers really seemed like they wanted you there. Multiple times they asked if we wanted something. Once they asked if we wanted an extra helping of mashed for one of our kids and I was jealous of the worms in the dirt dessert cup they get (candy worms in chocolate pudding with crumbled oreo on top). My wife asked and they brought one out for me. My mouth is watering thinking about the delicious food again.
In addition to the feeling that they want you there and providing excellent customer service, the variety of breads are yummy. I prefer the carrot nut bread myself. I just checked their website and it is funny, but smart, that they are on Facebook and Twitter. It is a great way for them to get their name and marketing out to more people.
Great Customer Service and Yummy Food,