There are many factors that shape the way you advertise a product. The product itself defines a given type of communication (you talk in a different way when you are discussing chips than when you’re talking about cars), the consumers also dictate some rules -your messages to teenagers and businesspersons differ. Another important factor shaping marketing communication is the place of your product on so-called life cycle curve. Let’s have a look at the way product life cycle influences its advertising.
Product life cycle
Product’s life cycle has a heavy impact on its market adaptation. Classic marketing theory distinguishes its four phases: market introduction, sales increase, market maturity and decrease phase. The last one may result in a withdrawal of a product from the market or its revitalization, revival or new market introduction (with changed features). You can do it over and over again.
Market introduction phase
In this phase, a new product is introduced to the market. A product that meets new demand or offers new solutions to the old problems. The main challenge for its marketing communication is first of all making Consumers aware of the product and of the fact they need it. The ones who buy products in the first phase of their life cycle are most often consumers looking for novelties. Having state of the art technology is what matters to them most and they are ready to pay for it. And they have to pay, as a new product doesn’t sell on a mass scale, so individual cost is relatively high.
How to communicate such products? Novelty, cutting-edge technology, technological breakthrough, something no one else has -these are the arguments that usually convince prospective buyers. Of course, functional arguments also matter -unique display quality, unmatched calculating power, revolutionary interface -still, studies have shown that novelty argument is the convincing one and the others act as rationalization for the decision that has been taken based on the novelty.
Introducing a new product, you stand a chance of creating the market for it. This pioneering is something you should also stress -you may have no competition today, but there’s no doubt it’ll spring up as soon as your product succeeds, and you’ll have to protect your position then.
Consumers have started appreciating your product and the sales are increasing like hell. It’s due to new people joining your consumers’ circle -the ones more reserved regarding new technologies who have been convinced by a mass of satisfied pioneers, positive newspaper reviews, etc. Production reaches critical mass, which makes it possible to lower individual costs -which in turn attracts further customers who have been previously discouraged by the price. The product is still considered new, but not a novelty any longer. Your competitors start hitting the market.
How to communicate with your consumers in this phase? First of all, stress the fact your product is gradually becoming a mass product and so a trendy one. They still stand a chance to buy it before others do, before it becomes popular, or common. This is the current phase of flat HD (plasmatic or LCD) TVs. The technology has been around for a couple of years, the prices are falling down and so an LCD TV is not such an extravagance as it used to be, however not every one has it yet, and it’s still a synonym for luxury&
This is the phase where you should start building your customers’ loyalty in case of frequent use goods. A bigger number of manufacturers will appear on the market, and thus the manufacturer of the original technology, or market pioneer gains an essential advantage over the others.
By that time, your product is commonly known and accepted. The majority purchases it, production has reached its peak and so the prices are kept at a relatively constant level. The market is saturated and the competition struggle to win the Customers is in progress.
This is the phase where loyalty, built at two previous stages, comes useful. In case of goods that do not matter much we tend to buy by the force of habit, therefore the sooner a producer accustoms us to a given product the better. As far as communication is concerned you should put an emphasis on the maturity of the product -the product you know well, millions have put their trust in us these are the clichés that appeal to the late majority (which is the term used to define consumers who buy products in this phase). In the meantime, the new generation of the same products (manufactured by you or your competitors) becomes your competition. They are the ones that tempt the pioneers. You may try to oppose them emphasizing the price, but it’s a short-lived strategy as you can see the dawn of&
The product is being replaced by other -newer, cheaper, more efficient. Only the ones who act by the force of habit or are petrified by changes tend to buy it at this phase. As well as consumers looking for a bargain, since outdated products can be purchased at low prices.
In your communication at this phase you should stress company or technology tradition -we have always been with you, we have never let you down, reliable technology, etc. You may also stress the fact that your product is good enough (it fulfils its basic functions) at considerably lower price.
If a company doesn’t take any action, a product in the decrease phase will simply fall out of the market. You should of course take care it’s not the only product in your offer -otherwise your company will disappear as well. Companies often pin new products to a brand that has been built for many years, that way starting the cycle anew under a well-known name. New formula, breakthrough technology etc. are perfect motives for product revival. It happens to washing powders and shampoos, but also electronic devices follow this trend. New iPods that replace old ones are just a sample of a life cycle of a new product under a well-known name.
Speaking of Apple it’s worth noting another marketing strategy it has mastered to perfection. No doubt, the first phase of a cycle, market introduction, is painful -you have to spend lots of money on advertising, convince consumers and sell your product at a sensible price in spite of high manufacturing costs. So why don’t you compress the first phase as much as possible. It’s just what Apple does& introducing its products before their real market release.
Consider iPhone case. Consumers are fed with previews, press reviews, closed sessions reports, etc half a year in advance before market release. Marketing with the use of video presentation on a website makes it possible to virtually touch the product before purchasing it. That’s the reason why immediately on the release the pioneers not only are determined to buy it, but also have spread the news about the product to early majority. The latter, who are less willing to purchase novelties are only looking forward to user reports (which are available just a couple of hours after market release) to become fully convinced. Thanks to that, the product enters dynamic increase phase practically immediately on its release, which makes it possible to lower the prices considerably just a couple of months later. Here’s the strategy worth learning and using in your own business.