During the introduction stage, companies spend most of their resources on product awareness and a customer base. The marketing team usually focuses on the four Ps of marketing: Show
ProductCreating a marketing campaign starts with understanding the product and asking questions like who needs this product? And why? And what unique features does my product offer that the competitor doesn’t? The marketer’s job is to define the product and highlight its features when they introduce it to the consumers. Next, they decide on the cost of the product, and how it will be distributed, and promoted. PricingIn the introduction stage, the product price is either too high (skimming pricing strategy) or low (penetration pricing strategy). You can do product price testing to measure your target consumer’s willingness to pay for your product. Skimming Marketing StrategyThe skimming pricing strategy involves charging a relatively higher price for a brief period of time after launching a new or improved product. With this strategy, companies can capitalize on consumers who are willing to pay a higher price to be among the first to get their hands on the product. A major advantage of using the skimming pricing strategy is that companies can recover the high development and other costs. After the initial launch, companies can lower the prices as the demand decreases. The downside of using a skimming pricing strategy in the introduction stage is that it may attract competitors. Other companies will take the high prices as a sign of high profit and a signal to jump into the market. Penetration Marketing StrategyThe penetration pricing strategy involves charging lower prices for a product in order to attract a larger consumer base. Keeping the prices low will also keep the competition at bay. This strategy usually results in a high sales volume helping you attain a large (if not dominant) market share. However, using a penetration pricing strategy requires a high invested capital, which is difficult in itself. Place (Distribution)Product place or distribution is the consideration of where the product should be sold. The term also refers to advertising the product in the media to help gain maximum customer attention. During the introduction stage, the product is usually placed in certain stores and displayed prominently to gain maximum attention from the consumers. The marketing team aims to put the product in front of consumers who will likely buy it. Once the product passes through the introduction stage and enters growth, companies can make the product available in more places. PromotionMarketing and promotion are important at every stage of the product life cycle. However, nothing can match the importance of product promotion and building product awareness in the introduction stage. To establish a strong brand, companies can also work with marketing or brand design agencies. During the introduction stage, product promotion is focused on spreading awareness and educating the consumers about the product. If a company is launching a big product, then test marketing can be a great way to test the product before the actual launch. Introductory promotions are a great way to encourage consumers to try your product. Once they give it a try, it’s only a matter of how good the product actually is. Learning Outcomes
There are some common marketing considerations associated with each stage of the PLC. How marketers think about the marketing mix and the blend of promotional activities–also known as the promotion mix–should reflect a product’s life-cycle stage and progress toward market adoption. These considerations cannot be used as a formula to guarantee success, but they can function as guidelines for thinking about budget, objectives, strategies, tactics, and potential opportunities and threats. Keep in mind that we will discuss the new-product development process next, so it is not covered here. Market Introduction StageThink of the market introduction stage as the product launch. This phase of the PLC requires a significant marketing budget. The market is not yet aware of the product or its benefits. Introducing a product involves convincing consumers that they have a problem or need which the new offering can uniquely address. At its core, messaging should convey, “This product is a great idea! You want this!” Usually a promotional budget is needed to create broad awareness and educate the market about the new product. To achieve these goals, often a product launch includes promotional elements such as a new Web site (or significant update to the existing site), a social media campaign, print or broadcast advertising, a press release and press campaign. There is also a need to invest in the development of the distribution channels and related marketing support. For a B2B product, this often requires training the sales force and developing sales tools and materials for direct and personal selling. In a B2C market, it might include training and incentivizing retail partners to stock and promote the product. Pricing strategies in the introduction phase are generally set fairly high, as there are fewer competitors in the market. This is often offset by early discounts and promotional pricing.  Google Glass It is worth noting that the launch will look different depending on how new the product is. If the product is a completely new innovation that the market has not seen before, then there is a need to both educate the market about the new offering and build awareness of it. In 2013 when Google launched Google Glass—an optical head-mounted computer display—it had not only to get the word out about the product but also help prospective buyers understand what it was and how it might be used. Google initially targeted tech-savvy audiences most interested in novelty and innovation (more about them later when we discuss diffusion of innovation). By offering the new product with a lot of media fanfare and limited availability, Google’s promotional strategy ignited demand among these segments. Tech bloggers and insiders blogged and tweeted about their Google Glass adventures, and word-of-mouth sharing about the new product spread rapidly. You can imagine that this was very different from the launch of Wheat Thins Spicy Buffalo crackers, an extension of an existing product line, targeting a different audience (retailers, consumers) with promotional activities that fit the product’s marketing and distribution channels. The Google Glass situation was also different from the launch of Tesla’s home battery. In that case Tesla offered a new line of home products from a company that had previously only offered automobiles. Breaking into new product categories and markets is challenging even for a well-regarded company like Tesla. As you might expect, the greater the difference in new products from a company’s existing offerings, the greater the complexity and expense of the introduction stage. One other consideration is the maturity of the product itself. Sometimes marketers will choose to be conservative during the marketing introduction stage when the product is not yet fully developed or proven, or when the distribution channels are not well established. This might mean initially introducing the product to only one segment of the market, doing less promotion, or limiting distribution (as with Google Glass). This approach allows for early customer feedback but reduces the risk of product issues during the launch. While we often think of an introduction or launch as a single event, this phase can last several years. Generally a product moves out of the introduction stage when it begins to see rapid growth, though what counts as “rapid growth” varies significantly based on the product and the market. Growth StageOnce rapid growth begins, the product or industry has entered the growth stage. When a product category begins to demonstrate significant growth, the market usually responds: new competitors enter the market, and larger companies acquire high-growth companies and products. These emerging competitive threats drive new marketing tactics. Marketers who have been seeking to build broad market awareness through the introduction phase must now differentiate their products from competitors, emphasizing unique features that appeal to target customers. The central thrust of market messaging and promotion during this stage is “This brand is the best!” Pricing also becomes more competitive and must be adjusted to align with the differentiation strategy. Often in the growth phase the marketer must pay significant attention to distribution. With a growing number of customers seeking the product, more distribution channels are needed. Mass marketing and other promotional strategies to reach more customers and segments start to make sense for consumer-focused markets during the growth stage. In business-to-business markets, personal selling and sales promotions often help open doors to broader growth. Marketers often must develop and support new distribution channels to meet demand. Through the growth phase, distribution partners will become more experienced selling the product and may require less support over time. The primary challenges during the growth phase are to identify a differentiated position in the market that allows the product to capture a significant portion of the demand and to manage distribution to meet the demand. Maturity StageWhen growth begins to plateau, the product has reached the maturity phase. In order to achieve strong business results through the maturity stage, the company must take advantage of economies of scale. This is usually a period in which marketers manage budget carefully, often redirecting resources toward products that are earlier in their life cycle and have higher revenue potential. At this stage, organizations are trying to extract as much value from an established product as they can, typically in a very competitive field. Marketing messages and promotions seek to remind customers about a great product, differentiate from competitors, and reinforce brand loyalty: “Remember why this brand is the best.” In this late in the life cycle, promotional tactics and pricing discounts are likely to provide only short-term benefits. Changes to product have a better chance of yielding more sustained results. In the maturity stage, marketers often focus on niche markets, using promotional strategies, messaging, and tactics designed to capture new share in these markets. Since there is no new growth, the emphasis shifts from drawing new customers to the market to winning more of the existing market. The company may extend a product line, adding new models that have greater appeal to a smaller segment of the market. Often, distribution partners will reduce their emphasis on mature products. A sales force will shift its focus to new products with more growth potential. A retailer will reallocate shelf space. When this happens the manufacturer may need to take on a stronger role in driving demand. We have repeatedly seen this tactic in the soft drink industry. As the market has matured, the number of different flavors of large brands like Coke and Pepsi has grown significantly. We will look at other product tactics to extend the growth phase and manage the maturity phase in the next section. Decline StageOnce a product or industry has entered decline, the focus shifts almost entirely to minimizing costs. Marketing spend is reduced for products in this life stage, because the marketing investment is better spent on other priorities. For goods, distributors will seek to eliminate inventory by cutting prices. For services, companies will reallocate staff to ensure that delivery costs are in check. Where possible, companies may initiate a planned obsolescence process. Commonly technology companies will announce to customers that they will not continue to support a product after a set obsolescence date. Often a primary focus for marketers during this stage is to transition customers to newer products that are earlier in the product life cycle and have more favorable economics. Promotional activities and marketing communications typically focus on making this transition successful among brand-loyal segments who still want the old product. A typical theme of marketing activity is “This familiar brand is still here, but now there’s something even better.” Practice QuestionContribute!Did you have an idea for improving this content? We’d love your input. Improve this pageLearn More What is the introduction stage of product life cycle?Definition: Introduction stage is the first stage in the product life cycle. The highlighting factor of this stage is that the product is new in the market, sales are slow and to push it higher the company has to incur heavy expenditure on advertisement to make it appealing to customers.
What is the promotional objective of the introduction stage of the product life cycle?The introduction stage is the first stage of the product's life cycle. Since the product is new in the market, the promotional objective is to inform consumers in an effort to increase their level of awareness.
What happens in the introduction stage of a product?The introduction stage is when a product is first launched in the marketplace. This is when marketing teams begin building product awareness and reaching out to potential customers. Typically, when a product is introduced, sales are low and demand builds slowly.
What is the promotional objective of the maturity stage of the product life cycle quizlet?What is the promotional objective of the Maturity stage of the Product Life Cycle? What are the tools used to accomplish this? Promo Objective- To remind the consumer about the product.
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