- Introduction.
- Growth.
- Maturity.
- Decline.
When introducing a new product or service to the market, organisations need to undertake market research to assist in making the decisions surrounding:
- Where will the product or service go in terms of sales.
- Deciding which sales channel to use.
- What sector of society should the product or service be aimed at.
- Who is going to buy it.
- How much is an organisation going to charge for it.
- Analysing who is going to want to purchase the product or service.
During the growth stage, organisations will need to ask questions to expand and examine new competitors, new potential markets and any changes in the brand image that may be required once a product or service reaches its maturity. The momentum in product or service sales will either climax or plateau.
To help
push the product or service to further success, an organisation must focus its
research efforts on competitive intelligence to acquire some of its potential
customer base to increase sales later in a product or service lifecycle.
As a product
or service begins to decline from the height of its success, organisations need
to assess how they can pivot the product or service or business strategy to
determine what changes can positively impact sales by analysing customers'
sensitivity to revitalise the potential to revamp revenue.
Understanding the product or service life cycle assists an Organisation and its Marketing Team in planning the marketing strategy to address each stage fully:
- Development: During the development stage, the product or service is an idea in the process of being developed and manufactured or not yet even for sale. The marketing mix at this stage is still in the planning phase. An Organisation will be researching marketing methods and planning on which the Organisation will use in launching the product or service. The marketing mix includes ways to increase the awareness of the product or service to potential customers through various special promotions and marketing campaigns.
- Introduction: As the product or service enters the introduction stage of the product or service life cycle, it hits the market, but because it is a new product or service, customers have yet to be made aware of it. Sales of the product or service during the introduction stage are generally low. Currently, marketing expenses are generally high because it requires much effort to bring awareness to the product or service. The marketing mix during this stage focuses on strategies to create a demand for the product or service to establish a market share.
- Growth: As the product or service enters the growth stage of the product or service life cycle, customers become more aware of the product or service and sales increase. During the growth stage, marketing tactics require branding that differentiates the product or service from other products or services. Marketing the product or service involves showing customers how the product or service benefits the consumer over the product or services sold by the competition and generally entails building brand preference.
- Maturity: As the product or service gains sales over its competition, it enters the maturity stage of the product or service life cycle. During this product or service lifecycle stage, the marketing mix involves building brand loyalty, mainly accomplished through incentives and special promotions to customers who switch from a competitor's brand.
- Decline: Once a product or service market is over-saturated, the product or service enters the decline stage. This is the product or service life cycle stage where the marketing mix and marketing efforts decline.
Suppose the
product or service has generated loyalty from customers. In that case, an
Organisation can retain customers during this stage but only attract new sales
from new customers. For the remaining marketing mix, the focus is generally on
reinforcing the product or service’s brand image to maintain a positive light
in the eyes of loyal customers.
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