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MANAGING PRODUCTS AND BRANDS PRODUCT LIFE CYCLE: STAGES Introduction Growth Maturity Decline Relate each stage to marketing objectives & strategies (marketing mix actions) INTRODUCTION: Stimulate primary demand ◊ for product class Create selective demand ◊ preference for a specific brand ◊ educating the consumers Pricing: skimming vs penetration Place: limited ◊ convince channel to carry GROWTH: Rapid increases in sales ◊ new users + repeat purchasers Profit peaks Competitors enter ◊ more competitive Overall mktg strategy: differentiate ◊ improve product, new features added (layering), product proliferation Place: expand distribution, more outlets Pricing: to gain market share, offer deals Promo: stress points of difference MATURITY STAGE: Slowing down of total industry sales Market saturation Shakeout: marginal firms eliminated CB: mostly repeat purchasers Profitability: declines ◊ fierce price fights Strategy: - hold market share - differentiate product - find new users - find new uses - reduce overall marketing costs DECLINE STAGE: Sales and profits drop New technologies replace current tech Elimination: drop product from product line Harvest: retains product but reduce mktg costs MANAGING THE PLC Product manager: Brand manager: in charge of mktg efforts for brand ◊ product category manager Product managers: responsible for seeing product thru its life Modifying the product: Altering attributes of product to enhance value and sales ◊ quality, performance, aesthetics Modifying the Market: Find new customers/users Increase usage – milk Create new use situation: OJ not for breakfast anymore Burger King ◊ in-between meal snacks Repositioning the Product: Change the place a product occupies in the consumer’s mind. HOW? a) react to competitor’s position – avoidance - New Balance: focus on comfort, fit b) reach a new market – rethink context of use - St Joseph Aspirin: mild for infants ◊ adults c) catch a rising trend: health trends, convenience trend .. - Quaker Oats: oatmeal ◊ low-saturated fat, low-cholesterol diet ◊ reduce heart disease risk d) change value offered: - trade up: Michelin/Goodyear ◊ ‘run-flat’ tires up to 55 miles after total air loss - trade down: reduce number of features, quality, or price