Marketing Management, Millenium Edition - epiheirimatikotita.gr

172 CHAPTER 9 POSITIONING PRODUCTS THROUGH THE LIFE CYCLETable 3.7Summary of Product Life Cycle Characteristics, Objectives, and StrategiesIntroduction Growth Maturity DeclineCharacteristicsSales Low sales Rapidly rising sales Peak sales Declining salesCosts High cost per Average cost Low cost Low costcustomer per customer per customer per customerProfits Negative Rising profits High profits Declining profitsCustomers Innovators Early adopters Middle majority LaggardsCompetitors Few Growing number Stable number Declining numberbeginning to declineMarketing ObjectivesCreate product Maximize market Maximize profit Reduceawareness and trial share while defending expenditure andmarket share milk the brandStrategiesProduct Offer a basic Offer product Diversify brands Phase out weakproduct extensions, service, and items modelswarrantyPrice Charge cost-plus Price to penetrate Price to match or Cut pricemarketbest competitors’Distribution Build selective Build intensive Build more Go selective:distribution distribution intensive phase outdistribution unprofitableoutletsAdvertising Build product Build awareness Stress brand Reduce to levelawareness among and interest in differences and needed to retainearly adopters and the mass market benefits hard-core loyalsdealersSales Promotion Use heavy sales Reduce to take Increase to Reduce topromotion to advantage of heavy encourage brand minimal levelentice trial consumer demand switchingSources: Chester R.Wasson, Dynamic Competitive and Product Life Cycles (Austin,TX: Austin Press, 1978); John A.Weber,“Planning Corporate Growth with Inverted Product Life Cycles,” Long Range Planning, October 1976, pp. 12–29; andPeter Doyle,“The Realities of the Product Life Cycle,” Quarterly Review of Marketing, Summer 1976.delays in the expansion of production capacity, technical problems (“working out thebugs”), delays in obtaining adequate distribution through retail outlets, and customerreluctance to change established behaviors. 21 Sales of expensive new products areretarded by additional factors such as product complexity and fewer buyers.Profits are negative or low in the introduction stage because of low sales andheavy distribution and promotion expenses. Much money is needed to attract distrib-