It is a well-known and universally accepted premise that all products go through four life cycle stages naturally. The key resulting concept to grasp and take away from this is that each of the four stages has its own challenges to overcome and opportunities to harness. This is where the marketing team comes in to play, as all stages require a particular toolbox of effective marketing strategies. This is a very important concept if you are looking to build a seven figure online business.
Marketers are required to carefully monitor the product sales and market conditions in order to understand intuitively the particular product cycle stage which the product occupies at any given moment. He can then craft the most appropriate strategies for marketing possible. The marketing strategies mainly revolve around four key features of product, price, promotion, and distribution. We will examine each of these in turn in more detail by going through the first three stages here.
Marketing Strategies for the Introduction Phase
In the initial stage of the Introduction, sales grow painfully slowly and profits are hardly or even non-existent. In this key upfront phase product an distribution are more key to focus on most heavily. In this phase, the most appropriate marketing strategies will be price and promotion. There are four strategies for controlling these two elements:
- Rapid Skimming Strategy – focuses on unveiling new items for higher prices with greater promotional expenditures. The idea behind higher price centers on recognizing the maximum profit amount for each unit wherever conceivable. It is the paired high level of promotional efforts that aim to persuade consumers to purchase the new product for a higher price. A greater level of marketing and advertising will propel the market penetration rate faster. It is essentially a strategy aimed at skimming off the highest possible profits out of the consumer market.
- Rapid Penetration – involves product launches for lower pricing points yet with a high level of promotion despite this. The idea is that the item can rapidly gain market share as it quickly penetrates the consumer market. The marketing team is also seeking to grow the entire product market through boosting the numbers of interested purchasers.
- Slow Skimming Strategy – this particular strategy is not intuitive. It revolves around a product launch done with lower promotion yet at a higher price point. The idea is that the high price will assist in recovering the maximum gross profit while the marketing costs are kept lower. It helps the firm to reap the optimal profits possible out of the consumer market early on in the process.
- Slow Penetration – focuses on the idea of both low pricing point as well as lower promotional expenses. Without a doubt, the lower pricing will help to propel the new product to acceptance while the lesser promotional budget will indeed increase the profits.
Marketing Strategies for the Growth Stage
In this rapid market gaining phase, strategies must be tailored to maintaining the high levels of growth to stretch them out as much as they can be. The goal is no longer to boost product awareness, but rather to encourage consumers to buy and try the item. Smart firms will also attempt to grow into new segments for the product.
As competition will be copying the product and competing for market share, the firm has to significantly strengthen the competitive position of the product. Successful companies understand it is practical to focus on bigger profits in the future than only seeking out the optimal ones in this point.
Marketing Strategies for the Maturity Stage
This is the point where competitors are already competing in the product market. The battle will often be ruthless and relentless in order to gain a greater share of the market. Firms will be forced to take on more aggressive stances and marketing strategies in order to overcome their competitors. They have two primary choices here:
- Doing Nothing – Believe it or not, this is sometimes an efficient strategy during this phase. It simply involves no new strategies and practically doing nothing new. The marketer is emphasizing saving money. At a later point, they might decide to invest in other newer products that the firm is developing now.
- Modifying the Market – works towards boosting the sales by increasing the quantities of people utilizing the product and/or brand as well as their average use rate per customer. Higher sales volume is the ultimate goal.