Product Life Cycle & Marketing Mix - Entrepreneurship PPT

Chapter II – Product Life Cycle PRODUCT LIFE CYCLE is the length of time from a product first being introduced to consumers until it is removed from the market. Four Stages of Product Life Cycle 1. Introduction Stage 2. Growth Stage 3. Maturity Stage 4. Decline Stage Four Stages of Product Life...

Chapter II – Product Life Cycle PRODUCT LIFE CYCLE is the length of time from a product first being introduced to consumers until it is removed from the market. Four Stages of Product Life Cycle 1. Introduction Stage 2. Growth Stage 3. Maturity Stage 4. Decline Stage Four Stages of Product Life Cycle 1. Introduction Stage ◦This is when the product is first launched into the market High promotional costs. Low or negative profits due to initial investment. Limited competition. Focus on gaining market acceptance. Four Stages of Product Life Cycle 2. Growth Stage ◦In this stage, the product starts to gain traction in the market, leading to increasing sales Rapid increase in sales and market acceptance. Profit margins improve as economies of scale kick in. Increasing competition and differentiation. Focus on expanding distribution and improving product features Four Stages of Product Life Cycle refers to the point at which a product or service has 3. Maturity Stage reached its maximum ◦The product reaches its peak market potential within a specific market. saturation. Sales growth slows or stabilizes. Intense competition. High profits but potentially lower margins due to price competition. Efforts to retain customers, reduce costs, and enhance customer experience. Four Stages of Product Life Cycle 3. Decline Stage ◦Eventually, the product experiences a decrease in sales and profitability, often due to newer alternatives, changes in customer preferences, or market saturation. Decreasing sales and profits. Customer interest wanes. Increased competition, often from newer or more innovative products. Potential for the product to be phased out or discontinued. Chapter II - Product Life Cycle 1. Introduction Stage: Product Launch: The healthy meal subscription service is launched, offering fresh, nutritious meals with customization options for different diets (e.g., vegan, keto, gluten-free, etc.). Awareness Building: At this stage, there may be limited market awareness. Marketing efforts focus on educating customers about the benefits of healthy eating, convenience, and the specific dietary options offered. Customer Acquisition: Efforts are focused on acquiring early adopters and building a customer base through targeted marketing campaigns, influencer partnerships, and perhaps promotional discounts. Branding & Positioning: Establishing a strong brand identity centered around health, sustainability, convenience, and customization. Product Life Cycle Activities: Setting up the kitchen and operational processes. Developing the website/app to manage subscriptions. Building supply chains for fresh ingredients. Testing delivery logistics. Engaging in initial digital marketing, social media campaigns, and influencer promotions. Offering trial periods or introductory pricing to attract the first customers. Revenue: Likely low at this stage as the customer base is just starting to grow. Profit margins may be thin due to the initial cost of marketing and operational setup. Product Life Cycle 2. Growth Stage: Increasing Customer Base: As the service gains recognition, the customer base grows rapidly. Word-of-mouth and positive reviews contribute to more subscriptions. Improved Brand Recognition: Awareness of the service increases through customer testimonials, digital marketing, and possibly collaborations with fitness influencers, health blogs, or corporate wellness programs. Product Refinement: The meal offerings become more refined based on customer feedback, with improvements in taste, packaging, and variety. Expansion of Product Offerings: The company may add new menu options, snacks, or customizable meals to cater to broader tastes and dietary needs (e.g., adding more meal plans for specific health goals like weight loss or muscle gain). Product Life Cycle Activities: Scaling up production and meal prep operations. Enhancing customer engagement through personalized meal recommendations. Offering flexible subscription plans to accommodate different customer needs. Increasing marketing efforts (ads, partnerships with wellness brands, influencer marketing). Improving logistics and distribution for faster delivery times. Revenue: Rapid revenue growth as more customers subscribe to the service. The business may start seeing its first profits, especially as the brand gains traction. Product Life Cycle 3. Maturity Stage: Market Saturation: The market for healthy meal subscriptions reaches a point of saturation. Most potential customers who would use a service like this have either subscribed or are aware of the option. Competitive Pressure: Competitors may emerge or existing companies may expand their offerings. The business might need to innovate with new meal options, loyalty programs, or unique services to differentiate itself. Stable Customer Base: The company experiences steady growth, but at a slower pace compared to the growth stage. Many customers become loyal subscribers, while some may switch to other options or cancel subscriptions due to lifestyle changes. Brand Loyalty and Retention Efforts: The business focuses heavily on retaining customers through loyalty programs, personalized meal recommendations, and high-quality customer service. Possible Diversification: To maintain growth, the company may Product Life Cycle Activities: Refining and differentiating the brand. Launching loyalty programs to encourage repeat customers. Exploring partnerships with fitness centers, gyms, or corporate wellness programs to expand the customer base. Maintaining high levels of customer service and satisfaction to retain subscribers. Innovating with new meal types or limited-time offers to keep the brand fresh Revenue: Steady and stable revenue, with higher profit margins as the business achieves economies of scale. Growth may be slower, but the business remains profitable. Product Life Cycle Chapter III – Marketing Mix Marketing Mix is the combination of key elements that businesses use to promote and sell their products or services effectively Marketing Mix - often referred to as the 4 Ps of marketing - expanded to 7Ps (Services) 4 Ps Product - This is what the company is offering to meet the needs or desires of customers. - It includes the design, features, quality, brand, packaging, and any associated services 4 Ps Price - This refers to how much the customer pays for the product or service. - Pricing strategies can include discount pricing, premium pricing, psychological pricing, or competitive pricing. 4 Ps A. Discount pricing is a pricing strategy where a business offers a reduction in the original price of a product or service to attract customers, increase sales, or move inventory. Examples: Seasonal Discounts, Promotional Discounts, Volume Discounts, Cash Discounts, Loyalty Discounts, Clearance Discounts, Bundling Discounts 4 Ps B. Psychological pricing are pricing strategies that leverage consumer behavior and psychology to encourage customers to make a purchase by influencing how they perceive the price. Examples: Charm pricing, Buy One Get One, Anchoring or Reference Pricing, Time-Limited Pricing, Decoy Pricing, Free Shipping Offers, Price Reduction Steps, Rebate or Cashback Offers. 4 Ps C. Competitive pricing is a pricing strategy where a business sets the price of its products or services based on what its competitors are charging, rather than focusing on production costs or desired profit margins. 4 Ps Place - This refers to the distribution channels through which the product reaches the customer. - It’s about ensuring that the product is available at the right time and location, whether through physical stores, online platforms, or distribution partners. 4 Ps Promotion - This refers to the marketing activities used to make potential customers aware of the product and persuade them to buy it. - includes advertising, sales promotions, public relations, direct marketing, and personal selling 4 Ps Advertising is a form of communication used by businesses, organizations, or individuals to promote or sell products, services, ideas, or causes. Goal - to persuade or inform potential customers and encourage them to take a specific action, such as making a purchase, signing up for a service, or becoming more aware of a brand. 4 Ps Types of Advertising 1. Traditional (print, broadcast, outdoor, direct mail) 2. Digital (Social Media, Search Engines, Email, Influencer) 3. Product Placement 4. Sponsorship and Events 4 Ps Sales promotion is a marketing strategy that involves offering temporary incentives to encourage customers to make a purchase or take a specific action. Goal - to drive immediate sales, increase customer interest, and attract new buyers. 4 Ps Types of Sales Promotion Discounts, BOGO, Coupons/Vouchers, Loyalty programs, Contests, sampling, rebates, flash sales, free gifts 4 Ps Public Relations (PR) refers to the strategic communication process that builds and maintains a positive image and reputation for an individual, organization, or brand. Components: Media Relations, Public Speaking and Events, Community Relations, Influencer relations, Internal Relations 4 Ps Direct marketing is a form of advertising where businesses communicate directly with potential customers to generate a response or transaction. Personal selling involves direct interaction between a salesperson and a potential customer, with the goal of persuading the customer to make a purchase. 7 Ps PEOPLE - refers to everyone involved in the delivery of the product or service, including employees, customer service teams, and even other customers. PROCESS - refers to the systems and processes that are involved in delivering the product or service. PHYSICAL EVIDENCE - refers to the tangible elements that help customers evaluate the product or service.