MKT 300 1nd Edition Lecture 18 Outline of Last Lecture XXXI Chapter 8 Terms part 2 XXXII Chapter 8 Concepts to Apply part 2 Outline of Current Lecture XXXIII Chapter 9 Terms part 1 XXXIV Chapter 9 Concepts to Apply part 1 Current Lecture XXXIII Chapter 9 Terms part 1 Product Life Cycle describes the stages a really new product idea goes through from beginning to end Divided into 1 market introduction 2 market growth 3 market maturity and 4 sales decline Marketing mix usually must change during the product life cycle Market Introduction stage 1 sales are low as new idea is first introduced to a market Informative promotion Companies experience loss in hope of future profits Market Growth stage 2 industry sales grow fast but industry profits rise and then start falling Competitors enter the market Monopolistic competition is typical Biggest profits for the industry Profits begin to decline at the end as competition brings price sensitivity to consumers Market Maturity stage 3 occurs when industry sales level off and competition gets tougher Aggressive competitors Industry profits go down Long run downward pressure on prices Persuasive promotion Sales Decline stage 4 new products replace the old Some sales by appealing to most loyal customers Fashion the currently accepted or popular style Tend to have short life cycles Fad an idea that is fashionable only to certain groups whoa re enthusiastic about it Even more short lived than a fashion I e low carb diets Lord of the Rings toy XXXIV Chapter 9 Concepts to Apply part 1 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute 1 Describe how market conditions differ in each of the 4 phases of the product life cycle How does understanding those differences help to drive marketing strategies a Market Introduction Low sales Use informative promotion to invest for future profits Only time competitors work together to sell a product pioneering selling the product not the brand b Market Growth Stage Monopolistic Competition Develops Profits peak and decline Innovation attracts competition Don t ignore long term competitive trends c Market Maturity Stage sales level off profits continue downward Greater competition Greater price sensitivity Brands are more similar Use persuasive more costly promotion Maturity may last a long time Most products we know are in this stage Intensely competitive d Sales Decline a time of replacement New products replace the old Price competition from dying products Conservative buyers switch late to new products so feed off of them 2 What are some tactics used to improve a product in maturity to extend its life cycle List two things to consider when deciding whether or not to discontinue a product a Move towards intensive distribution place b Persuading and reminding promotion c Meeting price cuts and deals price 3 How can understanding the smallest feature of your brand affect your USP and brand equity What is this important a You have to differentiate yourself in any way you can even if it is something small This will help your sales if you are different from competition Find the sweet spot what people really want and will pay for 4 What distinguishes a product modification from a new product with a new life cycle How does this relate to breakthrough products a A product modification is the same product w a new aspect i e Trado er Joes makes it s own goldfish type thing in a different shape b A new life cycle is a brand new product This is breakthrough 5 How does a new product definition differ between a manufacturer and the FTC Why is the difference important a Manufacturer defines the product in a way that people will buy it FTC defines a product honestly and with no deception Important b c the FTC will come at your if your definition of the product is deceptive to consumers