This week – fruitsofsuccess- is featuring a Marketing Week.
There will a new post on a marketing related topic each day. Today’s
subject is....
Product  |
| Nestle Nespresso's VertuoLine at Macy's East Pearson St., Chicago a week ago. VertuoLine was launched in Feb 2014 especially for the large cup American and Canadian markets |
Product planning is vital so that
· your products
are continuing to meet changing consumer needs
· your sales
results can be monitored against forecasts
· your new
marketing ideas can be evaluated and introduced if they are acceptable
· your profits today can finance tomorrow's new products.
Product Life Cycles
All products pass through five stages in their life,
although the length of the cycle varies according to each individual product.
DEVELOPMENT
INTRODUCTION
GROWTH
MATURITY
SATURATION & DECLINE
 |
| A Flip chart exercise: where delegates have plotted on a generic product life cycle diagram various products in their range |
DEVELOPMENT STAGE - Based on evaluation of Marketing Research,
products are designed, prototypes originated and tested, financial and human
resources are allocated to the product's development. Investment is relatively high and income is
zero. Many product ideas will be
eliminated at this stage.
INTRODUCTION STAGE - When the product is launched, considerable
marketing effort and promotional expenditure will be necessary. Income at this stage is minimal, but future
profits should offset these early losses.
GROWTH STAGE
- By this time, the investments made in the development and introductory
phases should begin to pay off. The
cumulative effect of the promotional mix should stimulate an upward growth for
the product. Profits will be at their
highest during this stage, paying back a high proportion of the preceding
investment. If the product is proving
successful, competitors will begin to enter the market.
MATURITY STAGE
- When a product reaches this stage there are generally a number of
competitors, and promotional expenditure to defend market positions will tend
to reduce profits, but sales will start to peak out.
SATURATION and; DECLINE STAGE - As the market becomes
saturated a downward trend in sales and market size will occur and profits will
markedly shrink at this stage. The
product is approaching its period of phasing out.
Product Types
Products fall into three distinct categories:
1. INNOVATIVE - i.e. totally new products
2. ADAPTIVE - existing product being modified to stretch its life cycle
3. IMITATIVE - products which are very close to those already on the market ('Me Too' products).
2. ADAPTIVE - existing product being modified to stretch its life cycle
3. IMITATIVE - products which are very close to those already on the market ('Me Too' products).
 |
| Centre Shelf with Nescafe pods versus other me too |
PRODUCT
DEVELOPMENT
Although many firms will develop their own products, there are three other methods by which they can enter a market:
- by
ACQUISITION take-over of other companies
to enter alternative markets
- by
MERGER where two or more
companies will effectively
or JOINT merge, either in terms of companies as a whole or
VENTURE a merging of specific product marketing.
 |
| Delegates decide on the elements within the marketing mix |
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