Sometimes other, more targeted advertising strategies are employed, such as billboards and transit signs signs on buses, taxis, subways, and so on. For more technical or expensive products such as computers or plasma televisions, many firms utilize professional selling, informational promotions, and in-store demonstrations so consumers can see how the products work. Many new convenient snack packages, such as jelly snacks and packages of different sizes, are available in China and the United States.
During introduction, an organization must have enough distribution outlets places where the product is sold or the service is available to get the product or service to the customers.
The product quantities must also be available to meet demand. When you were growing up, you may remember eating Rice Krispies Treats cereal, a very popular product. When demand is higher than supply, the door opens for competitors to enter the market, which is what happened when the microwave was introduced. As consumers in the United States initially saw and heard about the product, sales increased from forty thousand units to over a million units in only a few years.
Sales in Japan increased even more rapidly due to a lower price. As a result of the high demand in both countries, many competitors entered the market and prices dropped. Product pricing strategies in the introductory stage can vary depending on the type of product, competing products, the extra value the product provides consumers versus existing offerings, and the costs of developing and producing the product. Organizations want consumers to perceive that a new offering is better or more desirable than existing products.
Two strategies that are widely used in the introductory stage are penetration pricing and skimming. A penetration pricing strategy A strategy in which an organization offers a low initial price on a product so that it captures as much market share as possible. The organization hopes to sell a high volume in order to generate substantial revenues. New varieties of cereals, fragrances of shampoo, scents of detergents, and snack foods are often introduced at low initial prices.
Seldom does a company utilize a high price strategy with a product such as this. The low initial price of the product is often combined with advertising, coupons, samples, or other special incentives to increase awareness of the product and get consumers to try it. A company uses a skimming pricing strategy A high initial price that companies set when introducing new products in order to get back money invested. The skimming strategy attracts the top, or high end, of the market.
Generally this market consists of customers who are not as price sensitive or who are early adopters of products. Firms that produce electronic products such as DVRs, plasma televisions, and digital cameras set their prices high in the introductory stage. However, the high price must be consistent with the nature of the product as well as the other marketing strategies being used to promote it.
For example, engaging in more personal selling to customers, running ads targeting specific groups of customers, and placing the product in a limited number of distribution outlets are likely to be strategies firms use in conjunction with a skimming approach.
If a product is accepted by the marketplace, it enters the growth stage of the product life cycle. The growth stage The stage of the life cycle in which sales increase and more competitors enter the market. Unfortunately for the firm, the growth stage attracts competitors who enter the market very quickly. A company sometimes increases its promotional spending on a product during its growth stage.
However, instead of encouraging consumers to try the product, the promotions often focus on the specific benefits the product offers and its value relative to competitive offerings. In other words, although the company must still inform and educate customers, it must counter the competition. Companies typically begin to make a profit during the growth stage because more units are being sold and more revenue is generated.
The number of distribution outlets stores and dealers utilized to sell the product can also increase during the growth stage as a company tries to reach as much of the marketplace as possible.
Companies hope by increasing their sales, they also improve their profits. After many competitors enter the market and the number of potential new customers declines, the sales of a product typically begin to level off.
This indicates that a product has entered the maturity stage The stage of the product life cycle at which sales begin to level off and competitors have saturated the market. Most consumer products are in the mature stage of their life cycle; their buyers are repeat purchasers versus new customers. Intense competition causes profits to fall until only the strongest players remain. The maturity stage lasts longer than other stages. Quaker Oats and Ivory Soap are products in the maturity stage—they have been on the market for over one hundred years.
Given the competitive environment in the maturity stage, many products are promoted heavily to consumers by stronger competitors. The strategies used to promote the products often focus on value and benefits that give the offering a competitive advantage. Companies may decrease the price of mature products to counter the competition.
With the weakened economy, many online retailers engaged in price wars during the holiday season by cutting prices on their products and shipping costs; they repeated this price war strategy in Although large organizations such as Amazon. Many retailers learned from their mistakes and ordered less inventory for the holiday season; it remains to be seen what will happen in the holiday season. Companies are challenged to develop strategies to extend the maturity stage of their products so they remain competitive.
Many firms do so by modifying their target markets, their offerings, or their marketing strategies. Next, we look at each of these strategies. Modifying the target market helps a company attract different customers by seeking new users, going after different market segments, or finding new uses for a product in order to attract additional customers.
Financial institutions and automobile dealers realized that women have increased buying power and now market to them. With the growth in the number of online shoppers, more organizations sell their products and services through the Internet. Entering new markets provides companies an opportunity to extend the product life cycles of their different offerings.
A brand is born, grows lustily, attains maturity, and then enters declining years, after which it is quietly buried. Exhibit I shows profit-volume relationships that are supposed to prevail in a typical PLC.
Even a cursory analysis shows flaws in this picture. In the biological world the length of each stage in the cycle is fixed in fairly precise terms; moreover, one stage follows another in an immutable and irreversible sequence.
But neither of these conditions is characteristic of the marketing world. The length of different stages tends to vary from product to product. Some items move almost directly from introduction to maturity and have hardly any growth stage. Other products surge to sudden heights of fashion, hesitate momentarily at an uneasy peak, and then quickly drop off into total oblivion.
Their introductory and maturity stages are barely perceptible. Later in this article we shall examine a few examples of the unlifelike and noncyclical behavior of products. Despite the lack of correspondence between the marketing and the biological worlds, PLC advocates continue to remain dogmatic and proclaim that their concept has wide applications in different areas of planning and policy formulation.
While there is no unanimity among PLC advocates on details of this pattern, the basic relationships have been described repeatedly by authorities. Most writers present the PLC concept in qualitative terms, in the form of idealization without any empirical backing. Also, they fail to draw a clear distinction between product class e.
But, for our purposes, this does not matter. We shall see that it is not possible to validate the model at any of these levels of aggregation.
Many product classes have enjoyed and will probably continue to enjoy a long and prosperous maturity stage—far more than the human life expectancy of three score years and ten. Good examples are Scotch whisky, Italian vermouth, and French perfumes.
Their life span can be measured, not in decades, but in centuries. Almost as durable are such other product classes as automobiles, radios, mouthwashes, soft drinks, cough remedies, and face creams.
In fact, in the absence of technological breakthroughs, many product classes appear to be almost impervious to normal life cycle pressures, provided they satisfy some basic need, be it transportation, entertainment, health, nourishment, or the desire to be attractive.
As for product form, it tends to exhibit less stability than does product class. Theoretically, it presumes the existence of some rules indicating the movement of the product from one stage to another.
However, when one studies actual case histories, it becomes clear that no such rules can be objectively developed. For evidence of this conclusion, consider Exhibit III, which gives examples of life cycles of product forms in four diverse product classes: cigarettes, make-up bases, toilet tissues, and cereals.
In order to present a realistic picture, the sales whether in dollars or units have been adjusted to a common base in the light of varying annual consumer expenditures on nondurable goods. In this way, it becomes possible to remove changes that do not reflect life cycle patterns, e. Walter Thompson research. Note: Dollar sales figures are in thousands of dollars.
Both unit and dollar sales are adjusted to a common base of consumer nondurable goods expenditures. Although in most cases it is not feasible to go back far enough to get a complete birth-to-death portrayal, certain facts are obvious from Exhibit III:. One of the most thorough attempts to validate the PLC concept for product classes and product forms was carried out a few years ago by the Marketing Science Institute. They compared these actual inconsistent observations with simulated sequences of equal length generated with the aid of random numbers.
The outcome of this test was discouraging. The authors reached the following conclusion:. In our tests of the model against real sales data, it has not performed uniformly well against objective standards over a wide range of frequently purchased consumer products, nor has it performed equally well at different levels of product sales aggregation… Our results suggest strongly the life cycle concept, when used without careful formulation and testing as an explicit model, is more likely to be misleading than useful.
When it comes to brands, the PLC model has even less validity. Many potentially useful offerings die in the introductory stage because of inadequate product development or unwise market planning, or both. The much-expected ebullient growth phase never arrives. Even when a brand survives the introductory stage, the model in most cases cannot be used as a planning or a predictive tool. Exhibit IV shows the life cycle trends of certain brands in the product forms earlier discussed.
The evidence for the PLC concept is discouraging. With the exception of nonfilter cigarettes, the brands tend to have different sales patterns, and the product-form curves throw no light on what the sales would be in the future.
All that can be said is that if a product form e. However, with respect to the first three stages of the PLC, no firm conclusions can be drawn about brand behavior from the product-form curve. Note: All sales figures are adjusted to a common base of consumer nondurable goods expenditures.
Some PLC advocates have tried to salvage their theory by introducing different types of curves to fit different situations. For instance, one authority, in a study of ethical drug brands, suggests six different PLC curves 4 ; another develops no less than nine variants: marketing specialties, fashion cycle, high-learning products, low-learning products, pyramided cycles, instant busts, abortive introductions, straight fads, and fads with significant residual markets.
Such efforts at curve fitting leave much to be desired. From the standpoint of practical marketing, they are sterile exercises in taxonomy. It would be better to admit that the whole PLC concept has little value in the world of brands. Clearly, the PLC is a dependent variable which is determined by marketing actions; it is not an independent variable to which companies should adapt their marketing programs.
Of course, a company may not be able to extend the maturity phase indefinitely. Such a drop may be due to changes in consumer tastes and values, or to the fact that users have shifted their preference to a new and improved competitive product. Unfortunately, in numerous cases a brand is discontinued, not because of irreversible changes in consumer values or tastes, but because management, on the basis of the PLC theory, believes the brand has entered a dying stage. In effect, a self-fulfilling prophecy results.
Instead of thinking in terms of corrective measures, management begins to feel that its brand has entered a declining stage. The next year the brand does even worse, panic increases, and new products are hastily launched without proper testing. Not surprisingly, most of the new products fail. Thus management has talked itself into a decline by relying solely on the PLC concept.
The annals of business are full of cases of once strong and prosperous brands that have died—if not with a bang, at least with a whimper—because top management wore PLC blinders. A good example is the case of Ipana. This toothpaste was marketed by a leading packaged-goods company until , when it was abandoned in favor of new brands. In early , two Minnesota businessmen picked up the Ipana name, concocted a new formula, but left the package unchanged. In , a survey conducted by the Target Group Index showed that, despite poor distribution, the toothpaste was still being used by 1,, adults.
Use of chaels of distributio is miimized durig the first stages of promotio ad a major commitmet to advertis-. Accordig to Chad Chad, , strategy ivolvig the determiatio of which media are most appropriate for a advertisig campaig. A advertisig copy strategy states, i geeral terms, what iformatio the advertisig will covey ad why this product ca make these assertios of beefit to the cosumer Weilbacher, I the advertisig idustry, the term is sometimes used i a broad sese to iclude the words, pictures, symbols, colors, layout, ad other igrediets of a advertisemet Jai, Based o the above modified Delphi method beig itroduced i Sectio 3.
It should be oted that a alpha of 0. The casual diagram cosistig of all criteria is show i Fig. The major relatioships were deducted by settig threshold value as uder the promotio dimesios. If the threshold value is lower tha the give values, the relatioship or likages i the casual diagram of total relatioships will be too may to be aalyzed. Followig are the illustratios based o the ANP. Based o the defiitios of the ANP procedures i give Sectio 3.
Pair wise compariso results of the importace level of criteria beig coected to the same goal were deprived based o experts opiios ad were provided as iputs for ANP. With the aid of the Super Decisio Saaty, , a software which is used for decisio-makig with depedeces ad feedbacks by implemetig the ANP, the limit super matrix ca be derived.
For the most importat criteria for evaluatig the marketig mix strategies at the growth stage, most experts agreed that the demad perspectives c 3 is the most importat criterio for promotio strategies defiitios. For the most importat criteria for evaluatig the marketig mix strategies at the declie stage, most experts agreed that fiacial resources of the orgaizatio c 4 is importat criterio for promotio strategies defiitios.
The detailed weights ad performace scores ratigs are preseted i followig Tables. I this sectio, fidigs ad cotributios from both aspects of maagerial implicatios as well as research methods will be discussed from both aspects of major fidigs ad cotributios.
However, the limitatio of this research will be the amout of available experts due to the limited umber of available Taiwaese experts who could be got ito cotact i the related fields. For the marketig commuicatio mix beig derived, for the itroductio stage, the pull ad push strategies were derived as compoets of the marketig commuicatio mix; for the growth stage, the pull, push ad advertisemet-copy strategies were selected; for the saturatio stage, push ad pull were selected while for declie stage, advertisemet-copy ad medium selectio strategies were selected.
At the begiig stage, customers may be little aware of ew products which is goig to eterig to the market. So at this situatio, we ca through a large umber of advertisig-copy strategies so that people kow that this message as well as icrease the impressio of the product for customers. I both growth ad maturity stages, as to promotio aspect, the media- selectio strategy will be adopted o lot of emphasis o brad differeces, eve to ecourage customers to process brad switchig from competitors or maitai origial market share.
I a declie stage, whe the merchadise discover. Therefore, the firms must combie with a variety of promotioal tools i order to accelerate cosumers to buy goods. Desigig the marketig commuicatio strategy portfolio by cosiderig the iteractios betwee criteria.
Meawhile, there are few straightforward aswers addressig how the marketig commuicatio strategy portfolio ca be desiged to fit ay high techology busiess cotext. Not to metio how a marketig commuicatio strategy ca be desiged by cosiderig factors beig related to the product life cycle. Meawhile, from the aspect of MCDM multiple criteria decisio makig , very few researches addressed this global maufacturig ad logistics system desig issue.
The ovel MCDM model cosistig of Delphi, DEMATEL, ANP, VIKOR ad GRA was desiged to overcome: 1 the global maufacturig ad logistics strategy defiitio issue, 2 traditioal MCDM approaches for resolvig the global maufacturig ad logistics strategy defiitio problem based o the wrog assumptios o the idepedeces betwee the determiats, 3 the vague correlatios betwee determiats ad maufacturig as well as logistics strategies, 4 the lack of priorities of the promotio strategies.
Meawhile, we based o the cocept of VIKOR which ca be used to derive the optimal strategy which is closest to the ideals solutio. Through the case study, we foud the hybrid MCDM model to be applicable. Compared with to the traditioal Aalytic Hierarchy Process AHP which has the limitatio of a liear hierarchic structure that assumes the idepedece o of upper levels from lower levels, ANP provides a geeral framework to deal with decisios without makig assumptios about the idepedece of higher-level elemets from lower level elemets ad about the idepedece of the elemets withi a level as i a typical hierarchy Saaty Thus, for the global maufacturig ad logistics system ad strategies defiitio case illustrated i the paper, ANP is apparetly a more reasoable tool for aalyzig the etwork structure with feedbacks.
Meawhile, by leveragig the ANP, the most importat criteria ca be selected. Furthermore, i compariso with most ANP based researches without a appropriate approach for the decisio problem structure defiitio, the DEMATEL based approach provides a reasoable ad better alterative for structurig the decisio problem structure based o experts opiios. First of all, the promotio strategies have played a crucial strategic role, especially for high-tech products with short PLC characteristics.
Eve, umerous high techology compaies are expectig the strategies to be established ad executed with effectively i order to leverage competitive advatages at each PLC stage.
However, it seems to eglect placig importace o marketig variables ad marketig implicatios. This research arises from solvig the above problems o costruct a MCDM based decisio-makig marketig strategies model.
The assessmet method is based o gatherig opiios ad evaluatig alteratives by the experts with usig the mathematical model of evaluatig criteria, ad this approach could be cosidered as a cotributio of this paper.
These research results showed that the coectio degree betwee criteria as well as fid out the importat criteria which sigificatly ifluece the choice of marketig strategies uder each PLC. Fially, this research has proposed aalytical models to provide the best solutios approach available for marketig coflict maagemet. By offerig above LCD-TV marketig mix strategies over a PLC for compaies to make more correct decisio i the future with the complicated ad rapidly chagig market to orgaize ad adjust the directio i the future as well as to.
For future research directios, this proposed framework ca be applied o others idustries. Meawhile, the ratioality with modified Delphi is deserved to research or verify. Fially, the marketig mix strategies could be regard as depedet dimesio as well as combied them ito a itegrated framework. Marketig: a itroductio.
Assael, H. Forth Worth: Dryde Press. Bauer, H. Iteratioal Busiess Review, 9 6 , Birou, L. Che, Z. Expert Systems with Applicatios, 36 2 , Che, C. Expert Systems with Applicatio, 32 1 , Che, J.
Joural of Busiess, 40 4 , Curra, M. Joural of Cleaer Productio, 13 8 , Dalkey, N. Maagemet Sciece, 9 3 , Davies, W. Idustrial Marketig Maagemet, 26 1 , Day, G. Joural of Marketig, 45 Fall , Dickso, P. Fort Worth: Dryde Press. Doyle, P. Freimer, M. Maagemet Sciece, 22 6 , Golder, P.
Marketig Sciece, 23 2 , Ho, J. Pharmaceutical Executive, 23 7. Hori, S. Cotrol Egieerig Practice, 7 11 , Huag, C. Techovatio, 27 12 , Huag, J. Patter Recogitio Letters, 26 6 , Jai, S. College Divisio, South-Wester Pub. Joes, J. British Medical Joural, 5 , Joseph, A. Jai, S. South-Wester Publishig Co. Kepros, J. Joural of Surgical Research, 2 , Keri, R.
Khali, T. New York: McGraw-Hill. Kim, W. Sigapore; New York: Pretice Hall. Kotler, P. Krause, F. Sloa Maagemet Review, 39 3 , Lee, J. Harvard Busiess Review, 43 6 , Listoe, H. McGrath, M. New York. McGraw-Hill Compaies, Ic. Mohr, J. New York: Pearso Hall. Murry, J. Maagemet Sciece, 33 9 , Ofek, E.
Marketig Sciece, 22 3 , Opricovic, S. Faculty of Civil Egieerig, Belgrade. Opricovic, S. Busiess Horizos, 42 5 , Saaty, T. Saaty, T. Pittsburgh: RWS Publicatios. Saaty, R. Creative Decisios Foudatio. Sakai, N. I: Proceedigs of the third iteratioal symposium o evirometally coscious desig ad iverse maufacturig, Tokyo, Scott, G. Speece, M. Tzeg, G. Expert Systems with Applicatios, 32 4 , Tzeg, G.
Eergy Policy, 33 11 , Tzeg, G. Werker, C. Techovatio, 23 4 , Williams, J. Wier, R. Wog, H. Joural of World Busiess, 42 2 , Zikmud, W. The mai goal of every ecoomic aget is to make a good decisio,. Of all. Duft, Extesio Ecoomist I the March 98 issue of this publicatio we reviewed the procedure by which a capital ivestmet project was assessed.
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