Introduction
There are different stages in the product life cycle. The four stages are the introduction, growth, maturity and decline stages. The company should be strategic in marketing in each stage of the product life cycle in order to get a competitive edge in the market place.
The Role and Strategies in the Marketing Business Function
The marketing function in an organization has several roles. The department is in charge of customer analysis where the company examines and evaluates the needs, wants and desires of the customers. There are several approaches used. The company may carry out research and surveys in order to know information such as customer segmentation and demographic data. This role is necessary in the introduction phase of the product.
After launching the product, the company may carry out customer analysis to find out the reception of the product by the customers. What did the people think of the product? How are the sales? For a company to be successful, they have to conduct customer analysis in all the stages of the product life cycle. In the growth and maturity stages, the company may seek to know how to improve their products and in the declining stage to investigate the reduction in sales.
The marketing team also has the role to employ appropriate selling strategies for the company. The selling strategies include advertising, sales promotion, sales force management, customer and dealer relations and publicity. In the introduction and growth stages of the product, the company has to be intensive in advertising and publicity in order to create awareness of the product and its attributes.
In the later stages of maturity and decline the company employs sales promotion and personal selling strategies to increase sales and get intimate with the customer to explain the key attributes of the product. The third role of marketing function is product and service planning where the department does product and brand positioning, test marketing, analysis of the packaging, features, style and removal of old products and offers warranties.
This strategy is applied only in the mature and decline stages as the company seeks to undertake product development and diversification to increase sales. It allows a company to identify the weak products with low revenue for removal from the product lines so that the company can concentrate on other products bringing high revenue. It also helps the company know any ineffective marketing approaches they may be using.
The department is in charge of pricing. There are many factors affecting pricing such as government taxes and policies, competitors, suppliers, distributors and consumers. This aspect affects the product at all stages of the product life cycle.
In the mature and growth stages, the company may lower their prices in order to attract more customers through promotions. In the introduction stage the price depends on the existing prices in the market and the customer segmentation bracket the company is aiming at. In the growth stages the company has secured customers loyalty and goodwill and prices can be set competitively in the market.
Distribution, another role of marketing, is the use of different channels to get the products to the consumers. In the introduction and growth stages the company has to use all the distributions channels available as they have to create awareness of the product and demonstrate reliability on the availability of their products. In the mature stage the company may choose to have their goods only in
selected locations. Lastly, the department is in charge of cost benefit analysis. The department looks at the costs, rewards, risks of marketing activities. This is to enable the department to rank the activities that offer the best opportunities due to the profits earned. This is important in all the product life stages. The shareholders at the end of the day want to increase their wealth and management must ensure it.
Intensive Strategies
There are three kinds of intensive strategies. Intensive strategies in a business are applied when the business wants to improve their firm’s competitive edge. They require a lot of intensive efforts. There are three types of intensive strategies. There is market penetration where the company seeks to increase the market share for the company’s products.
Greater marketing efforts are employed in the present markets. The company increases the advertising expense budget and the salespersons in the market. There will be a lot of publicity efforts and promotional campaigns. This strategy is very appropriate when the company’s products in the product life cycle are in the introduction and growth stages. The strategy is used where the current markets have not yet fully been saturated.
The company could also have noted that the sales of the company are increasing and the people are now increasing their expenditure on the product significantly. For a product that is in the mature stage, market penetration may not really work. The strategy is also effective when the competitors have been losing ground in terms of sales yet in the whole industry, the statistics show that sales of products are increasing. The company may also find itself with the capabilities in producing in large
scale, such that the economies of scale give them significant competitive advantages. The second strategy in intensive strategies is market development. This is when the company goes into new territories with their existing goods and services. This occurs when the company’s products are in the maturity and declining stages in the product life cycle in the usual territorial locations. The market is saturated and the advertising and marketing has reached all the people.
This strategy is effective for the mature and declining stages when the organizational has become very efficient and effective in the production of their goods and services. The company must find new untapped or new markets. These markets must exist for the strategy to work. The company must also have the capability to produce more. It must have underutilized machinery time, labor time and capital resources.
The company should not strain at all in handling the expanded operations. There has to be new channels of distribution available for the company to use. The distribution channels should be affordable, effective and reliable. The company realizes they have to be global or international as their present markets have become saturated and sales are decreasing. The third strategy in the use of intensive strategies is the use of product development. At this point the company seeks to improve or modify their existing products.
This strategy is not used in the introduction or growth period of the product life cycle. It is used in the mature and declining stages in the existing market areas. A lot of expenditure occurs in the company’s research and development departments as they seek to find out from the customers what they like or do not like about their products. Quality research should be carried for effectiveness.
The customers in the region know all about the product. The question is “are they satisfied or happy?” If they use the competitor’s products, why are they doing so? Customer’s surveys may be carried out during this period. What is the rationale of the company in using this strategy? The company hopes to attract their existing customers to use their improved products based on the customer loyalty and goodwill that already exists.
The company may also use this strategy when they are in an industry with intense technological innovations. The technological advancements necessitate them to constantly and consistently to improve their products. For the strategy to be effective, the company should have adequate research and development capabilities so that quality research is carried out.
The company may adopt the strategy when their competitors suddenly launch products that are a better quality at the normal market prices. This strategy is also effective in high-growth industries. The growth stage company may use the strategy only when the rate of growth in sales of company’s product is very high. In the decline stage the company may opt to do personal selling through salespersons in order to increase sales. Market research is a crucial role for the department.
This refers to the company gathering, recording and analyzing the data on the customer needs, preferences and perception of the company’s products. The research is carried out continuously in all the stages in the product cycle. It is a process that shows the company their strengths and weaknesses in the market place.
Conclusion The company in applying these marketing strategy concepts will become the leader in the marketing place. In the current global market the management has to be strategic.