504 PART 4 SHAPING AND PRICING THE MARKET OFFERING: ‘The traditional term product can lead to confusion as buyers’ market conditions normally require companies to offer a package of tangible (traditional product atributes and benefits) and sup. portive intangible (traditional service attributes and benefits} to meet customer-perceived value requirements and expectations. This is why the text frequently refers to the term market offering, which embodies the tangible and intangible components of this newly defined product. The conventional term ‘product’ and ‘market offering’ are interchangeable. A company’s positioning and differentiation strategy must change as the product/market offering, market and competitors change over the product li to assert four things: yele (PLC). To say that a product (market offering) has a life cycle is | Product life-cycle marketing strategies 1 Products (market offerings) have a limited life, 2 Sales pass through distinct stages, each posing different challenges, opportunities and prob- lems to the seller. 3. Profits rise and fall at different stages of the product life cycle 4 Products require different marketing, financial, manufacturing, purchasing and human resource strategies in each life cycle stage. Product life cycles Classic PLC curves are portrayed as bell-shaped (see Figure 14.1). The curve is typically divided into four stages: introduction, growth, maturity and decline, 1 Introduction: a period of slow sales growth as the product (market offering) is introduced i into the market, Profits are non-existent because of the heavy expenses associated with mar i ket introduction i! 2 Growth: a period of rapid market acceptance and substantial profit improvement, 3 Maturity: a slowdown in sales growth because the product (market offering) has achieved acceptance by most potential buyers. Profits stabilise or decline because of increased ‘competition 4. Decline: sales show a downward drift and profits decline, The PLC concept can be applied to analyse a product category (alcohol), a product form (white alcohol), a product (vodka) or a brand (Smirnoff). Not all products exhibit a bell-shaped PLC. ‘Three common alternative pattems are shown in Figure 14.2 Figure 14.2(a) shows a growth-slump-maturity pattern, often characteristic of small kitchen appliances, such as handheld mixers and bread-makers. Sales grow rapidly when the item is first introduced and then fall o a residual level that is sustained by late adopters buying for the first time and early adopters replacing it Sales and profits (6) a Inwroduetion Grow Maturity Deciine Time Figure 14.1. Long-range product market expansion stategy504 PART 4 SHAPING AND PRICING THE MARKET OFFERING. Product life-cycle marketing strategies ‘The waditional term product can lead to confusion as buyers’ market conditions normally require companies to offer a package of tangible (traditional product attributes and benefits) and sup- portive intangible (traditional service attributes and benefits) to meet customer-perceived valu requirements and expectations. This is why the text frequently refers to the term market offering, Which embodies the tangible and intangible components of this newly defined product, The conventional term ‘product’ and ‘market offering! are interchangeable, A company’s positioning and differentiation strategy must change as the product/market offering, market and competitors change over the product life cycle (PLC). To say that a product (market offering) has a life cycle is to assert four things: 1. Products (market offerings) have a limited life. 2 Sales pass through distinct stages, each posing different challenges, opportunities and prob. lems to the seller. 3. Profits rise and fall at different stages of the product life cyde. 4. Products require different marketing, financial, manufacturing, purchasing and human resource strategies in each life cycle stage: Product life cycles Classic PLC curves are portrayed as bell-shaped (see Figure 14.1). The curve is typically divided into four stages: introduction, growth, maturity and decline. 1 Introduction: a period of slow sales growth as the product (market offering) is introduced into the market, Profits are non-existent because of the heavy expenses associated with mar. ket introduction, 2. Growth: a period of rapid market acceptance and substantial profit improvement. 3. Maturity: a slowdown in sales growth because the product (market offering) has achieved acceptance by most potential buyers. Profits stabilise or decline because of increased competition, 4 Decline: sales show a downward drift and profits decline, The PLC concept can be applied to analyse a product category (alcohol), a product form (white alcohol), a product (vodka) or a brand (Smitnoff), Not all products exhibit a bell-shaped PLC. Three common alternative patterns are shown in Figure 14.2. Figure 14,2(a) shows a growth-slump-maturity pattern, often characteristic of small kitchen appliances, such as handheld mixers and bread-makers, Sales grow rapidly when the item is fist introduced and then fall to a residual level that is sustained by late adopters buying for the first me and early adopters replacing it. 2 5 rofit. Time Figure 14.1. Long-range product market expansion strategy CHAPTER 14_ DESIGNING, DEVELOPING AND MANAGING MARKET OFFERINGS 505 (4) Growth-slump-maturity pattern (b) cycle-recycle pattern Sales volume Sales volume Primary Recycle oye Figure 14.2 Common product life-cycle patterns ‘The cycle-reqle pattem in Figure 14.2(b) often describes the sales of new drugs. The phar maceutical company aggressively promotes its new drug, and this produces th sales start declining and the company responds by triggering another marketing communication push, which produces a second cycle (usually of smaller magnitude and duration). Another common pattem is the scalloped PLC in Figure 14.2(c). Here sal succession of life cycles based on the discovery of new product/market offer uses or users. The sale of nylon, e first cycle. Later, les pass through a ring characteristics, for example, shows a scalloped pattern because of the many new uses ~ parachutes, hosiery, shirts, carpeting, boat sails, car tyres ~ that continue to be discovered overtime, Style, fashion and fad life cycles (gue 14.3). A spl isa bac and diincive mode of eooon Syia weee ee (French, Italian, Scandinavian and Spanish); clothing (formal, casual); and art (realistic surreal. Ihe length fs fthon oles ant predic One pinto ew dahon nd heemse Pata ashion ele depen on te extent oh is taki ee tehologia inte oon Fad areishions hat ome ick no publi ve te adopted with eat zl pkey and deine vey sey Citinatin the United Siglo cei a inctiveness, Sales Sales Time Figure 14.3 style fashion and fa life cycles (Scalloped pattern style Fashion Fad