What is a product life cycle and how does the life cycle affect the market strategy of the product? Discuss the different ways prices are set for new products.
· Research a product or idea from a company such as Microsoft, Google, or Apple that failed during the steps of new product development. What step/stage did it fail? Why?
· What significance does packaging have on the consumer when comparing similar products? How are products marketed?
· Examine three products you use daily â this can be for work, school, etc. Evaluate the marketing strategy for each product including the product, price, promotion and distribution.
Sample Answer
Product life cycle
The product life cycle is the sequence of stages that a product goes through from its introduction to its decline. The four stages of the product life cycle are:
- Introduction:Â The product is new to the market and sales are low. The company is focused on creating awareness of the product and building a distribution network.
- Growth:Â Sales are increasing rapidly and the company is focused on expanding its market share.
- Maturity:Â Sales have reached their peak and the company is focused on maintaining its market share and defending itself from competitors.
- Decline:Â Sales are decreasing and the company is focused on reducing costs and maximizing profits before the product is discontinued.
How the product life cycle affects the market strategy
The product life cycle has a significant impact on the market strategy of the product. In the introduction stage, the company needs to focus on creating awareness and demand for the product. In the growth stage, the company needs to focus on expanding its market share and defending itself from competitors. In the maturity stage, the company needs to focus on maintaining its market share and maximizing profits. In the decline stage, the company needs to focus on reducing costs and maximizing profits before the product is discontinued.
Full Answer Section
Pricing strategies for new products
There are a number of different pricing strategies that companies use for new products. Some common pricing strategies include:
- Market penetration pricing:Â The company sets a low price to quickly enter the market and gain market share.
- Skimming pricing:Â The company sets a high price to maximize profits early in the product’s life cycle.
- Cost-plus pricing:Â The company calculates a price that covers its costs plus a profit margin.
- Value-based pricing:Â The company sets a price based on the perceived value of the product to the customer.
Company product failures
Here are some examples of company product failures:
- Microsoft Zune:Â The Zune was a portable media player that was released in 2006 to compete with the iPod. However, the Zune failed to gain traction in the market and was discontinued in 2012.
- Google Glass:Â Google Glass was a wearable device that was released in 2013. It allowed users to access the internet, check email, and take pictures and videos hands-free. However, Google Glass was criticized for its high price, privacy concerns, and limited functionality. It was discontinued in 2015.
- Apple AirPower:Â The AirPower was a wireless charging mat that was announced in 2017. It was supposed to be able to charge up to three devices simultaneously. However, the AirPower was never released due to technical challenges. It was cancelled in 2019.
Significance of packaging
Packaging is important because it can influence consumers’ purchasing decisions. It can also protect the product from damage and help it to stand out from competing products.
How products are marketed
Products are marketed through a variety of channels, including advertising, public relations, social media, and sales promotion. The specific marketing strategy used will vary depending on the product, the target market, and the budget.
Evaluation of marketing strategies for three products
Here is a brief evaluation of the marketing strategies for three products that I use daily:
- Apple iPhone:Â The iPhone is a premium smartphone that is marketed as a stylish and innovative device. The iPhone is marketed through a variety of channels, including advertising, public relations, social media, and sales promotion. Apple also has a strong brand reputation, which helps to drive sales of the iPhone.
- Nike sneakers:Â Nike sneakers are marketed as high-quality athletic shoes that can help athletes to improve their performance. Nike sneakers are marketed through a variety of channels, including advertising, public relations, social media, and sales promotion. Nike also has a strong brand reputation, which helps to drive sales of its sneakers.
- Colgate toothpaste:Â Colgate toothpaste is a mass-market toothpaste that is marketed as a way to maintain healthy teeth and gums. Colgate toothpaste is marketed through a variety of channels, including advertising, public relations, social media, and sales promotion. Colgate also has a strong brand reputation, which helps to drive sales of its toothpaste.
All three of these products use a combination of marketing strategies to reach their target markets and promote their products. The specific marketing strategies used will vary depending on the product, the target market, and the budget. However, all three products use a mix of marketing strategies to create awareness, generate demand, and drive sales.
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