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Positioning Strategies in Product Life Cycle

Pratap chandra Mandal

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Objectives

What is Positioning?

What marketing strategies are appropriate at each stage of

the Product Life Cycle?

What are the implications of market evolution for marketing

strategies?

Positioning

As part of the strategic management process, each offering must represent a

compelling, distinctive big idea in the mind of the target market.

Positioning is the act of designing the company’s offering and image to

occupy a distinctive place in the minds of the target market.

The goal is to locate the brand in the minds of the consumers to maximize the

potential benefit to the firm.

A good brand positioning helps guide marketing strategy by clarifying the

brand’s essence, what goals it helps the consumer achieve and how it does

so in a unique way.

The result of positioning is the successful creation of a customer-focused

value proposition, a cogent reason why the target market should buy the

product.

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Product Life Cycle

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A product passes through many stages starting from inception to it’s death.

These stages constitute the Product Life Cycle.

A product has the following characteristics:

• Products have a limited life.

• Product sales passes through distinct stages, each posing different

challenges, opportunities and problems to the seller.

• Profits rise and fall at different stages of the product life cycle.

• Products require different marketing, financial, manufacturing, purchasing

and human resources strategies in each life-cycle stage.

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Different Stages of Product Life Cycle

Most product life cycle curves are portrayed as bell-shaped. This curve is

typically divided into four stages – Introduction, Growth, Maturity and

Decline.

• Introduction: A period of slow sales growth as the product is introduced in

the market. Profits are non-existent because of the heavy expenses of

product introduction.

• Growth: A period of rapid market acceptance and substantial profit

improvement.

• Maturity: A slowdown in sales growth because the product has achieved

acceptance by the most potential buyers. Profits stabilize or decline

because of increased competition.

• Decline: Sales show a downward drift and profits erode.

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Marketing Strategy – Introduction Stage

Promotion should be the highest.

Inform potential customers.

Induce product trial.

Secure distribution in retail outlets.

Decide on when to enter the market.

Innovation should be the highest.

Marketing Strategy – Growth Stage

The company improves product quality and adds new product features

and improved styling.

It adds new models.

It enters new market segments.

It increases its distribution coverage and enters new distribution channels.

It shifts from product-awareness advertising to product-preference

advertising.

It lowers prices to attract the next layer of price-sensitive buyers.

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Marketing Strategy – Maturity Stage

• Market Modification

• Product Modification

- Quality Improvement

- Feature Improvement

- Style Improvement

• Marketing Program Modification

- Prices

- Distribution

- Advertising

- Sales Promotion

- Personal Selling

- Services

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Marketing Strategy – Decline Stage

• Exit Strategy

• The appropriate strategy also depends on the industry’s relative attractiveness

and the company’s competitive strength in that industry.

• A company that is in an unattractive industry but possess competitive strength

should consider shrinking selectively.

• A company that is in an attractive industry but has competitive strength should

consider strengthening its investment.

• Companies that successfully restage or rejuvenate a mature product often do so

by adding value to the original offering.

• Harvest

• Divest

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Market Evolution

• Emergence

• Growth

• Maturity

• Decline