18 Questions
What is a key objective of promotional expenditures during the introduction stage of a product?
Secure distribution in retail outlets
What does a company typically do to sustain rapid market share growth during the growth stage of a product?
Introduce new models and flanker products
In which stage of the product life cycle does the rate of sales growth slow down, and the product enters a phase of relative maturity?
Maturity stage
What strategy may a company employ to expand the market for its mature brand?
Work on factors that make up sales volume
What typically happens to profits and promotional expenditures in the decline stage of a product?
Profits are low or negative, and promotional expenditures decrease
During which stage of the product life cycle do firms typically lower prices to attract price-sensitive buyers?
Decline stage
What are the elements that brand managers might modify to stimulate sales?
Price, distribution, and communication
In the decline stage, what strategy involves reducing costs while trying to maintain sales?
Harvesting
What does quality improvement in product modification strategies aim to achieve?
Expand the product's performance
What is a characteristic of style improvement in product modification strategies?
Increasing the product's esthetic appeal
What is a key reason behind sales decline in the decline stage according to the text?
Technological advances
In market-challenger strategies, what is one of the potential targets for a challenger firm?
"Attacking firms its own size not doing the job"
What is a common challenge faced by companies in the decline stage of the product life cycle?
Rapid market growth
How can companies overcome the challenge of fragmented markets in the maturity stage of the product life cycle?
Increasing the product development costs
Which factor contributes to shorter product life cycles in the decline stage of the product life cycle?
Extended decline phase
What is a key reason for companies facing capital shortages in the new product development process?
Satisfaction of consumer safety concerns
How can poor launch timing impact new products in the market?
Causing insufficient interest in the products
Why is it important for a new product to receive adequate organizational support?
To prevent rapid market growth
Study Notes
Product Life Cycle
- A product goes through four stages: Introduction, Growth, Maturity, and Decline.
Introduction Stage
- Profits are negative or low, and promotional expenditures are high.
- The goal is to inform potential consumers, induce product trial, and secure distribution in retail outlets.
Growth Stage
- The firm improves product quality, adds new features and styling, and introduces new models.
- The firm enters new market segments, increases distribution coverage, and enters new distribution channels.
- Communication shifts from awareness and trial to preference and loyalty.
Maturity Stage
- The rate of sales growth slows, and the product enters a stage of relative maturity.
- The maturity stage has three phases: growth, stable, and decaying maturity.
Marketing Strategies in Maturity Stage
- Market modification: expanding the market for the mature brand.
- Product modification: improving quality, features, or style.
- Marketing program modification: modifying nonproduct elements like price, distribution, and communications.
Product Modification Strategies
- Quality improvement: increasing functional performance.
- Feature improvement: adding size, weight, materials, supplements, and accessories.
- Style improvement: increasing esthetic appeal.
Decline Stage
- Sales decline due to technological advances, shifts in consumer tastes, and increased competition.
- Harvesting: reducing a product or business's costs while maintaining sales.
Other Competitive Marketing Strategies
- Market-challenger strategies: setting high aspirations and attacking the market leader or smaller firms.
- Market-follower strategies: commercializing new products.
New Product Development Process
- Post-launch evaluation: performance analysis and continuous improvement.
New Product Failures
- Shortage of important ideas in certain areas.
- Fragmented markets: targeting smaller market segments.
- Social, economic, and governmental constraints.
- Cost of development: high R&D, manufacturing, and marketing costs.
- Capital shortages: difficulty raising funds for research and launch.
- Poor launch timing: launching after the category has already taken off or when there is insufficient interest.
- Shorter product life cycles: rivals quickly copying success.
- Organizational support: lack of support from the corporate culture or financial support.
Test your knowledge on product modification and marketing strategies including quality improvement, feature improvement, marketing program modification, and stimulating sales through nonproduct elements.
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