ee ea Sa FIFTH EDITIONa) @ @) @ Chapter 6 Product decisions Marketed at high price and aggressive marketing communication campaign, known as a rapid skimming strategy; lots spent on advertising/personal selling to increase rate of market penetration; combination used if competition is expected, and to promote brand preference for product Marketed at high price and low expenditure on marketing communications, known as low skimming strategy; an attempt thus made to make profit in this phase, especially if product is an innovation Marketed at low price and high expenditure onmarketing communication, known as rapid penetration; this enables the most rapid market penetration rate and largest market share; combination can be used if market is very large, unaware of product and most consumers are price-sensitive, and if costs per unit decrease considerably with increase in production size Marketed at low price and low expenditure on marketing communication, known as slow penetration strategy; low price encourages rapid acceptance of product; marketing communication costs kept low to realize more profit; good combination if demand is price elastic, if market is large, consumers know the product, market is price sensitive and some competition already exists. The above price and marketing communication decisions are summarised in figure 6.14. Marketing communication High Low Slow skimming |] strategy || Rapid penetratior strategy 1] | ‘Source: Kotler, P1997. Marketing Management: Analysis, Planning, Implementation, Control. Upper Saddle River: Prentice-Hall, p 351 Figure 6.14 Price and communication decisions during the introductory phase The growth phase In the growth phase there is a rapid increase in sales. This could be due to increasing awareness of the product and successful trial marketing. Another reason is that there may be repeat purchases by satisfied users. The emphasis here is on building brand preference and loyalty as soon as possible and on increasing the number of outlets stocking the product. Another characteristic [>