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Developing marketing strategies

Developing marketing strategies. Factors affecting marketing strategy (a) Product life cycle stage - marketing strategy must be adapted to the product stage in its life cycle (introduction, growth, maturity, or decline) (b) Company’s competitive position in the market

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Developing marketing strategies

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  1. Developing marketing strategies • Factors affecting marketing strategy (a) Product life cycle stage - marketing strategy must be adapted to the product stage in its life cycle (introduction, growth, maturity, or decline) (b) Company’s competitive position in the market - whether the company is a leader, challenger, follower, or nicher

  2. Stages of product life cycle • Introduction - period of slow growth of sales as the product is introduced in the market - Profits are low because of heavy expenses of product introduction • Growth - a period of rapid increase in sales - substantial profit

  3. Stages of product life cycle • Maturity - a period of slowdown in sales growth because the product has achieved by most of the potential buyers - Profits stabilize or decline because of increased marketing outlays to defend the product against competition • Decline - the period when sales show a strong downward drift - profits erode

  4. Marketing strategy in the introduction stage • Rapid-skimming strategy - launching the new product at a high price and a high promotional level • Market conditions - large part of the potential market is unaware of the product - those who become aware are eager to have the product and able to pay the asking price - the firm faces potential competition and wants to build up brand preference.

  5. Marketing strategy in the introduction stage • Slow-skimming strategy - launching the new product at high price and low promotion • Market conditions - the market is limited in size - most of the market is aware of the product - buyers are willing to pay a higher price - potential competition is not imminent

  6. Marketing strategy in the introduction stage • Rapid-penetration strategy - launching the product at a low price and spending heavily on promotion • Market conditions - the market is large - the market is unaware about the product - most buyers are price sensitive - strong potential competition

  7. Marketing strategy in the introduction stage • Slow-penetration strategy - launching the new product at a low price and low level of promotion • Market conditions - market is large - market is highly aware about the product - demand is price sensitive - there is some potential competition

  8. Marketing strategies in the growth stage • The firm improves product quality and adds new product features • It enters into new market segments • It enters in new distribution channels • Advertising focus shifts from building product awareness to bringing about product purchase

  9. Marketing strategies in the maturity stage • Market modification - expand the market for its product by working with the two factors that make sales volume sales volume = number of users x usage rate per user

  10. Marketing strategies in the maturity stage • The company can try to expand the number of product users through - convert nonusers - enter new market segment - win competitors’ customers • Volume can also be increased by getting current users to increase their usage of the product - gap between recommended dose and present use - extension strategy

  11. Marketing strategies in the maturity stage • Product modification - modifying the product characteristics in a way that will attract new users and/or more usage from current users - quality improvement to increase the functional performance of the product - feature improvement aims at adding new features (size, accessories) that expand product convenience

  12. Marketing strategies in the maturity stage • Marketing-mix modifications (a) Prices - would a price cut attract new users? - if so, should the list price be lowered or should price be lowered through price specials, early purchase discount, volume related discounts or easier credit terms

  13. Marketing strategies in the maturity stage (b) Distribution - exploring new distribution channel (c) Advertising - changing advertising message, timing, frequency (d) Sales promotion - step up sales promotion through rebates, gifts, and contests

  14. Stages of product life cycle

  15. Stages of product life cycle

  16. Stages of product life cycle

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