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|the main Marketing Marketing Basics - Kotler Philip|
Marketing Basics - Kotler Philip
Having released a new product to the market, management prays that it will have a long and happy life. Although no one expects that the goods will be sold forever, the company seeks to ensure a decent profit in compensation for all the efforts and risks associated with the emergence of a new product. Management hopes that sales will be high and long-term. It knows that each product has its own life cycle, although the nature and extent of this cycle is not easy to predict.
A typical product life cycle is represented by a curve in fig. 55. Four phases are clearly distinguished in this cycle.
Fig. 55. The nature of sales and profits throughout the life cycle of the product from its creation to decline
1. Market launch phase - a period of slow sales growth as the product enters the market. Due to the high costs of removing the product, there are still no profits at this stage.
2. Stage of growth - a period of rapid perception of goods by the market and rapid growth of profits.
3. Maturity stage - a period of slowdown in sales due to the fact that the product has already reached the perception of most potential buyers. Profits are stabilized or reduced due to rising costs of protecting the product from competitors.
4. Stage of decline - a period characterized by a sharp drop in sales and decline in profits.
Although the product life cycle curve presented here is typical, it does not always look like this. One of the most common options is the “with a repeated cycle” curve (see Fig. 56a) 6. The second "hump" of sales is caused by sales promotion measures carried out at the stage of product decline. Another variation is the “comb” curve (see Fig. 56b), consisting of a sequential series of cycles generated by the discovery of new characteristics of the product, new ways of using it, and the appearance of new users. For example, the “comb” curve is characterized by the sale of nylon, due to the emergence over the years, many new areas of its use - parachutes, stockings and underwear, shirts, carpets.
Fig. 56. Possible options for the product life cycle curve
The concept of a life cycle can be used to describe a whole product class (cars with gasoline engines), a variety of goods (convertibles) or a specific brand ("Mustang"). In each of these cases, the concept of a life cycle has a different character. The longest life cycle of product classes. Sales of many product classes are delayed for a long time as part of the maturity phase. And vice versa. Species usually have a typical life cycle curve. Products such as dial-up phones and deodorant creams go through the usual market launch, rapid growth, maturity, and decline. The history of an individual brand depends on its success and on the effectiveness of its competitors ’attacks and counterattacks. The life cycles of a number of well-known car brands are presented in Fig. 57.
Fig. 57. Life cycle curves of some car brands
The concept of a life cycle can be applied to such well-known phenomena as style, fashion or fetish. Their life cycles are described in Box 24.
Box 24. The life cycle of styles, fashion, and fetishes.
In markets dominated by styles and fashion, there is a cyclical nature. Market players should be able to understand these predictions and predict them.
Style is the main peculiar form of expression that arises in one or another sphere of human activity, for example, there are styles in dwellings (colonial, ranch style, Cape Cod style), in clothes (evening, everyday, for the soul) and art (realistic, surreal, abstract). Once created, a style can exist for many generations, now gaining wide popularity, then losing it. The style is characterized by a cycle with several periods of increased interest.
Fashion is the most popular or common style in a given period of time in a given field of activity. For example, today jeans are in fashion and dancing is the “new wave”. Fashion goes through four stages in its development. At the stage of a bright personality, some consumers begin to be interested in some new product, trying to stand out from the environment around them. This novelty can be a product made to order or released by some of the manufacturers in a small batch. At the stage of imitation, other consumers also become interested in the novelty, driven by the desire to imitate fashion leaders, and a larger number of manufacturers begin to produce goods in increased batches. At the stage of mass distribution, the mod becomes extremely popular, and manufacturers release the goods on a massive scale. And finally, at the stage of decline, consumers begin to switch to other fashion trends that come to the fore. Thus, the fashion goes through a period of rather slow growth, remains popular for some time, and then a period of slow decline begins. The duration of an individual stage in the fashion cycle is very difficult to predict.
Fetishes are private manifestations of fashion that quickly gain general attention, are received with great enthusiasm, quickly reach the peak of popularity and very quickly go to the stage of decline. The cycle of their recognition is short and, as a rule, the number of their adherents is limited. Fetishes are often inherent in some unusual trait or some kind of twist. Say, people suddenly start to buy "favorite cobblestones" or run naked and dye large locks of hair under gray hair. Fetishes appeal to people who are either looking for something unusual, or want to stand out from the environment, or crave topics for talking with others. Fetishes are transient, because they either do not satisfy any strong need, or they are obviously not enough, It is very difficult to predict whether something will turn out to be just a fetish, and if so, for how long - for a few days, weeks, months. Among other circumstances, the fetish's lifespan also depends on how much media attention is paid to it.