Product/Market Lifecycle Flashcards
Economics of the Market Lifecycle
Introduction: price and risks are high: only a small number of buyers will gain sufficient benefit from the product or service to justify the cost
Growth: Price and risk have fallen, a large number of buyers will see the benefits of the product or service as being worth the cost
Mature Stage: Risks are almost non-existent although the cost of change may carry risk, benefits exceed the costs for a large number of customers
Decline: The cost of change is not yet balanced by the benefits of the new technology for some customers, benefits fall because substitute technologies are now giving better performance
Market Stages
Development, Introduction growth, maturity, saturation, decline or stabilise
Visionaries, pragmatists, conservatives, sceptics
Question mark, star, cash cows, dogs
Understanding the Buying Process
Initial Purchase Trigger: external trigger, internal trigger, business drivers, personal drivers
Information Gathering: press articles, published surveys, recommendations
Selection Process:
Products: quality, design, promise od availability, delivery
Services: promise of quality, availability, performance
Price is relative
Channel Choice
Push Strategy: This strategy focuses on pushing products through the distribution channel to reach the end consumers. In this approach, the emphasis is on promoting the product to distributors, wholesalers, or retailers, who then push the product to the end users. This strategy works well when buyers primarily make their purchasing decisions based on the availability and accessibility of products through certain channels. Therefore, marketing efforts are directed towards intermediaries rather than end consumers.
Pull Strategy: In contrast, a pull strategy aims to create demand among end consumers, encouraging them to seek out and purchase the product from retailers or other channels. This approach involves building brand awareness, loyalty, and preference among consumers through advertising, promotions, and other marketing activities. When buyers are more influenced by the brand itself rather than the distribution channel, a pull strategy is more effective. The goal is to generate consumer demand that pulls the product through the distribution channel.
Changes to Market Message
Knowledge of the technology passes from the seller to the buyer during the evolution of a market
Start: buyers look for support and education
End: Buyers look for low cost channels and efficiency of supply
Changes to the Cost of Communication
Proposition:
What does this product/service do?
Does it solve a key problem?
How do I manage the risks?
How can I buy it?
Application
How does one solution differ from another?
Which would be the best for me?
What are the standards?
Brand
How do prices compare?
Which is most convenient?
Which is the safest choice?
Reinforcement:
Why should I continue to use this product or service?
Marketing to…
Innovators
Tech conferences
Exhibitions
Ads and articles in tech magazines
Free demos, literature and data sheets
Personal selling by technical people
Early adopters
Business press articles
National press articles
Conferences
Exhibitions
Personal selling by articulate sales people
Early Majority
Seminars
Demonstrations
Trade press articles
Case studies
Advertising
Direct mail
Value added resellers
Late Majority
National press
Trade press
TV and radio
Mass market resellers
Telesales
Sales promotion
Sponsorship
Sales Channel Evolution
Face to face
Technical Resellers
Mass market catalogues
Fewer channels prepared to carry product
