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Page 1: Bevan ianmarketing

Product differentiation

Palm V Customer advantage

Chapter 10 Concepts

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Product differentiation

Image differentiation Personnel differentiation

Two Ways

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Product Life Cycle Concept

• Cradle to grave marketing outlook• Broken into 4 phases

Decline

Growth

Introduction

Maturity

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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

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Life cycle patterns

Xerox Europe

1st copier life cycle

Refurbish & Re-sell

(repeat)

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Introduction Stage

Introduction

Low sales High Prices Heavy Marketing Early Adopters

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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

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Introduction Stage Marketing Strategies

For Pioneers

New Mkt

Create a new product

New Model of 1st product

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Introduction stage marketing strategies

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

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Growth Stage

Growth

Sales Increase High PricesEarly adopters Create more

demand

Output Expansion

Competition!!!

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Growth Stage Marketing Strategies

Better Quality New Market Segments

Marketing Preference, not existence

Price Cuts!

Increase Distribution

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Mature Products

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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

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Decline Stage of Maturity

Declining Stage

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

The Big Three

General Characteristics

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Changing Brand Course 3 main changes

Market modification Product modification Marketing modifications

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Marketing Program Modifications Should we modify?

Price Distribution Channels Advertising

Sales PromotionsPersonal SellingMore Services

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Decline Stage

Declining sales Technology Advances

Decline Stage

Change in TasteForeign / Domestic

Competition

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Decline Stage Options

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

of operations• Cut prices• Divestment• Harvesting

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Critique of Product Life Cycle

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

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Critique of Product Life Cycle

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