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Customers are regularly bombarded by advertisements telling them about exciting new features of existing products. For instance, a car that now has apple car play as standard.
Almost everything is trying to integrate the internet and smartphone technology into is offering – such as controlling your heating from your phone or perhaps; a brand of detergent with a new, improved formula; or a snack that now contains even more healthier products.
So why are some brands regularly giving their products and services make-overs and a renewed focus on marketing, while other brands are left to sell themselves? It's simple, their marketing activities are being determined by where their product is in its lifecycle! And you should be analyzing this for your brand too!
If you’re not a marketer here’s a quick analogy to help you understand the model. Just as people go through infancy, childhood, adulthood and old age, so too do products and brands. And just as we swing from being needy to being overall contributors to our families or to society, and then back to being needy again over the course of our lives, so – in effect – do products.
THE FOUR PHASES OF YOUR BRANDS PRODUCT'S LIFE CYCLE ARE:
Introduction
Growth
Maturity
Decline
Each phase requires a different mix of marketing activities to maximize the lifetime profitability of the product. In general, this involves early investment to help secure revenue later on. This is an ideal time to bring in a Pretty Vicious Marketing consultant to determine where your brand is currently in its lifecycle. You can do this by purchasing a Pretty Vicious Health Check, which will help you determine which stage of the lifecycle your brand is currently in.
During the early stages of introduction to the market, the cost of promoting the product may be larger than the revenue it brings in. However, for successful products that are marketed effectively, the product will become increasingly profitable during the Growth and Maturity phases. The image below details the typical lifecycle for a well-managed product.
Moving on to the Growth phase, marketing activities should focus on adding new features to the product to expand your brand's market and enter into new segments.
By the time your product reaches its Maturity phase, your brand is producing running at optimum speed and is reaping considerable rewards for the time and money spent developing the product so far. The product's features should continue to be refreshed from time to time, and there should still be some promotion to differentiate the product from the competition and increase market share. However, the marketing activity and expenditure levels should be much lower than earlier on in the lifecycle.
However, as an entrepreneur, you also have to comfortable enough to pull the plug once the product begins to decline. At this point, your sales could entirely be the result of the product's residual reputation among a small section of loyal customers. If this is the case the most important decision that needs to be made is when to take the product off the market completely.
It can be tempting to leave a declining product on the market – especially if it served your brand well in its time, and there's a certain sentimental attachment to it. However, it is essential that the product is not allowed to start costing you more money than it is generating, and this can easily happen if production costs increase as revenues drop. You also have to think about how much time and resources. The old product's very existence absorbs time, energy and resources. This could even delay the development of a new, potentially more profitable replacement product for your brand.
TIP: The duration of each lifecycle phase can be controlled, to a certain extent. Especially the Maturity phase: which is the most important one to extend from a financial point of view because this is the period when your product is at its most profitable.
Get in touch and we can discuss suitable tactics designed to extend the maturity phase of your #productlifecycle. It's possible that by continually improving a product, growth can continue for a long time but you’ll need a wide range of data and analysis to help decide which phase your product is in and whether that phase can be extended.
So remember while the model will not predict sales, when used alongside carefully analyzed sales figures and forecasts, it provides a useful guide to #marketingtactics that may be most appropriate at a given time and we recommend consulting a professional to help you with this.
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Until next time...
