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product life cycle (PLC)
the stages a product goes through in the marketplace
concept that seeks to describe a products sales, competitors, customers, + marketing emphasis from its beginning until it is removed from the market
introduction
full-scale launch of new product into marketplace
sales are low, high failure rate
little competition
frequent product modification
limited distribution
high marketing + product costs
growth
sales grow at an increasing rate
many competitors enter market
large companies may acquire small pioneering firms
profits are healthy
maturity
sales continue to increase but at a decreasing rate
marketplace is approaching saturation
typified by annual models of products with an emphasis on style rather than function
products lines are wider or extended
marginal competitors drop out
decline
signaled by a long-run drop in sales
rate of decline is governed by how rapidly consumer tastes change or how rapidly substitute products are adopted
falling demand forces many out of market
deletion
drop product from product line
harvesting
retain product but reduce marketing costs
self fulfilling prophecy
many firms may engage in a self fulfilling prophecy, whereby they predict falling sales + then ensure this by reducing or removing marketing support
modifying the product
after one or more of the product characteristics to increase value to customers + increase sales
modifying the market
find new customers, increase product use
repositioning the product
change the place (image) the product occupies in consumers minds relative to competitive products
adoption
the process by which a consumer or business customer begins to buy + use a new good, service, or idea
diffusion
describes how the use of a product spreads throughout a population
relative advantage
a product innovation is perceived as better than existing alternatives
positively correlated with an innovations adoption rate
exist when a new product offers better performance, increased comfort, saving in the time + effort, or immediacy of reward
compatibility
an innovation is perceived to fit into a persons way of doing things
an innovation fits with other complementary products
the greater compatibility, the more rapid a products rate of adoption
overcome perception of incompatibility through heavy advertising to persuade consumers
complexity
the degree to which products or its use is difficult to understand
the more complex the product, the more slowly a products rate of adoption
overcome perception of complexity with demonstrations, personal selling, + emphasis on ease of use
trialability
ease of sampling the product is to people who might adopt it
the trial experience serves to reduce the risk of a consumers being dissatisfied with a product offer having permanently committed to it through outright purchase
observability
how visible the product is to people who might adopt it
the higher the visibility, the more rapid the adoption rate
innovators
2.5%, the first to accept a new idea or product
venturesome + willing to take risks
cosmopolites: willing to seek social relationships outside of their local peer group
rely heavily on impersonal information sources
early adopters
13.5%, the seconds to adopt an innovation
heavy media users
tend to be concerned with social acceptance
opinion leaders primarily come from the early adopter group (very socially connected)
early majority
34%, adopt the product prior to the mean time of adoption
deliberate + cautious
spend more time in the innovation decision process
slightly above average in education + social status
late majority
34%, follow the average adoption time
older, more conservative
peers are the primary source of new ideas
below average in education, income, + social status
wait to purchase until product has become a necessity and/or peers pressure to adopt
laggards
16%, last to adopt an innovation
lower in social class than other categories
bound by tradition
product may have already been replaced by another innovation
brand
a name, term, symbol, logo, or any other unique element of a product that identifies one firms product(s) + sets it apart from competition
is a signal or a promise
should suggest product benefits, be memorable + distinctive, have positive connotation, fit with desired image, no legal/regulatory restrictions, simple and/or emotional, ‘convert’ well for international use
brand equity
brands value to its organization
added value to a brand gives to a product beyond the functional benefits
assets + liabilities linked to a brand that add to or subtract from the value provided by the product or service
provides customer loyalty, perceived quality, brand name awareness, competitive advantage
can be used to establish brand extensions
individual branding (multibranding)
each product has its own brand
family (corporate brands (multiproduct))
market all (or a group of) products under an umbrella brand
national/manufacturer brands
producers brands (kraft mayo)
private label/reseller/store
store brands
licensing
one firm sells the right to another firm to use its brand under specific circumstances
co-branding → ingredient branding
one brand is a part/component that makes up the other product/brand
co-branding → cooperative branding
two brands receive fairly equal treatment, borrow from each others brand equity
co-branding → complementary branding
two brands marketed together to suggest use
packaging functions
perceptual benefits → communicate brand personality, positioning, distinguish from other brands
communication benefits → instructions/directions, required information
functional benefits → protect the product, make the package/product more user-friendly
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