Product differentiation

Palm V Customer advantage

Chapter 10 Concepts

Product differentiation

Image differentiation Personnel differentiation

Two Ways

Product Life Cycle Concept

• Cradle to grave marketing outlook• Broken into 4 phases

Decline

Growth

Introduction

Maturity

Assumptions: Product Life Cycle Concept

• Limited life for each product

In Each Stage• Different sales and profits• Different strategies in:

Marketing Financial Manufacturing Human resources

–

Life cycle patterns

Xerox Europe

1st copier life cycle

Refurbish & Re-sell

(repeat)

Introduction Stage

Introduction

Low sales High Prices Heavy Marketing Early Adopters

Introduction Stage Marketing Strategies

For Pioneers

Don’t just jump in. Do your research Heavy Marketing

New Mkt

Original Mkt

Find a new Mkt segment

Introduction Stage Marketing Strategies

For Pioneers

New Mkt

Create a new product

New Model of 1st product

Introduction stage marketing strategies

For Followers• Less R&D• Find / fix failures of pioneer• Market these differences• Innovate quickly

Growth Stage

Growth

Sales Increase High PricesEarly adopters Create more

demand

Output Expansion

Competition!!!

Growth Stage Marketing Strategies

Better Quality New Market Segments

Marketing Preference, not existence

Price Cuts!

Increase Distribution

Mature Products

Maturity Stage

• Longer than previous stages• Most products are mature

Maturity stages

Growth Stage

Stable Stage

Declining Stage

•Sales growth haulting•No new distribution channels

Decline Stage of Maturity

Declining Stage

•Sales stopping•Over capacity•Intense competition•Frequent markdowns•Increase advertisement•Shake out

The Big Three

General Characteristics

Changing Brand Course 3 main changes

Market modification Product modification Marketing modifications

Marketing Program Modifications Should we modify?

Price Distribution Channels Advertising

Sales PromotionsPersonal SellingMore Services

Decline Stage

Declining sales Technology Advances

Decline Stage

Change in TasteForeign / Domestic

Competition

Decline Stage Options

• Hang on • Keep only strong products• Reduce to minimum level

of operations• Cut prices• Divestment• Harvesting

Critique of Product Life Cycle

• Patterns too variable• Hard to tell what stage products are in• Self-fulfilling results

Critique of Product Life Cycle

• Patterns too variable• Hard to tell what stage products are in• Self-fulfilling results