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Marketing Basics - Kotler Philip

Stage of product launch

The withdrawal phase starts from the moment the product is distributed and it goes on sale. The process of bringing a product to the market takes time, and sales usually grow slowly during this period. Well-known products such as instant coffee, iced orange juice and coffee powder creams had to wait more than one year before they entered a period of rapid growth. Slow growth can be explained by the following circumstances: 1) delays in expanding production capacities, 2) technical problems (elimination of “snags”), 3) delays in delivering goods to consumers, especially when establishing proper distribution through various retail outlets, 4) reluctance of customers abandon the usual patterns of behavior 7. In cases with expensive new products, sales growth is also hampered by a number of other factors, such as the small number of customers who are able to perceive the product and allow themselves to purchase it.

At this stage, the company either incurs losses or profits are very small due to insignificant sales and high costs of organizing the distribution of goods and stimulating their sales. The incentive costs at this time reach their highest level “due to the need for concentrated efforts to promote the new product, in order to: 1) inform potential consumers about a new product not known to them, 2) encourage them to test the product, and 3) ensure distribution of this product through retailers ”8.

There are few manufacturers at this stage, and they release only the main variants of the product, since the market is not yet ready for the perception of its modifications. Firms focus their marketing efforts on consumers who are most prepared to make a purchase, usually on high-income groups. Prices at this stage are usually increased.