The Product Lifecycle and the Marketing Strategy

The Product Lifecycle and the Marketing

StrategyEnterprise & Project Management

Please note that these slides are not intended as a substitute

to reading the recommended text for this course.

PLC

Promotional Strategy

Factors that influence price

Implications of pricing

Objectives

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PLC

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Strategic Considerations Duringthe Product Life Cycle

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The promotion strategy is the most visible marketing strategy.

It is designed to get the attention of prospective customers and convincethem to buy from your business.

Promotion is communication intended to persuade, inform, or remind a target audience about a business or its products.

Inspire desire

Initiate action

The promotion strategy involves

– planning,

– determining the right promotional mix,

– and selecting specific promotional activities.

Promotion

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Advertising

Personal selling (sales)

Public relations and publicity

Sales promotion / Merchandising

Five Promotional Mix Elements

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Promotion Types

Above-the-line promotion

– Purchasing communication with the consumer – AKA –advertising

Below-the-line promotion

– Short-term incentives to encourage consumers to purchase the product

Ab

ove

-the

-line

Belo

w-th

e-lin

e

Promotions that

are visual &

auditory

TV Ads,

billboards,

radio, print ads

Promotions that

are tactile

Samples,

coupons,

loyalty

programs,

games, price

deals 6

Push / Pull Marketing

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The Promotional Mix

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PLC and Promotional Co-ordination

PR X X

Advertising X X X

Direct Marketing X X X

Personal Selling X X X X

Sales Promotion X X

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Product – Offer a basic product

Price – Use cost-plus basis to set

Distribution – Build selective distribution

Advertising – Build awareness among early adopters and dealers/resellers

Sales Promotion – Heavy expenditures to create trial

Marketing Strategies: Introduction Stage

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Product – Offer product extensions, service, warranty

Price – Penetration pricing

Distribution – Build intensive distribution

Advertising – Build awareness and interest in the mass market

Sales Promotion – Reduce expenditures to take advantage of consumer demand

Marketing Strategies: Growth Stage

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Product – Diversify brand and models

Price – Set to match or beat competition

Distribution – Build more intensive distribution

Advertising – Stress brand differences and benefits

Sales Promotion – Increase to encourage brand switching

Marketing Strategies: Maturity Stage

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Product – Phase out weak items

Price – Cut price

Distribution – Use selective distribution: phase out unprofitable outlets

Advertising – Reduce to level needed to retain hard-core loyalists

Sales Promotion – Reduce to minimal level

Marketing Strategies: Decline Stage

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Analysis of communication

needs

Selection of promotion tools

Integration into marketing

communications

Implementation of promotional

campaign

Control, comparing

results against objectives

Review and revise

promotional tool

Marketing Coordination

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No easy formula for pricing industrial product or service

Decision is multidimensional

Each interactive variable assumes significance

Key Components of the Price-Setting Decision Process

Set Strategic Pricing

Objectives

Estimate Demand and the

Price Elasticity of Demand

Determine Costs and

their Relationship to Volume

Examine Competitors’

Prices and Strategies

Set the Price Level

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Pricing decisions are influenced by various factors

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Pricing Policy &

Decisions

Customer needs &

Characteristics

Economic Conditions

Cost of the Product

Company Objectives

Competition

Elasticity of Demand

Elastic Demand

Consumers buy more or lessof a product when the price changes

InelasticDemand

An increase or decrease in price will not significantly affect demand

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Pricing decisions from a company perspective

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How should products pass from the manufacturer to the final customer?

Channel of distribution: the chain of intermediaries a product passes through from producer to final consumer

PLACE

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Consumers need easy access to the firm’s product where they can see it, touch it, buy it, return it.

Manufacturers need distribution that provides a wide market coverage.

Retailers need to mark-up the product to cover the costs of sales.

Distribution Channel is Important

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Direct Selling

Manufacturer to Consumer

Manufacturer Consumer

Product/Service

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Single-Intermediary Channel

Manufacturer to a Retailer to a Customer

Manufacturer Retailer Consumer

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Two-Intermediary Channel

Manufacturer to Wholesaler to Retailer to a Customer

Manufacturer Warehouse Retailer Consumer

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