Launching Strategies and PLC
Transcript of Launching Strategies and PLC
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STRATEGIC PRODUCT LAUNCH
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Whats a good/bad new/existing
product/launch/promotion/ad/package Why?
Name the 3 most unique brands you can think of and tell me
why you think they are unique.Whats an innovative product? What would you do to improveit?
How would change the way brand Nescafe is marketed?
Give me 3 line extensions for brand Lifebuoy. Whats yourcritical comment?
When you walk down the supermarket aisle, what productjumps out and says buy me and why?
What would the title of your autobiography be?
QUESTIONS
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Recent Study of nearly 300 companies
93% of Marketing department responsible for
product launches (89% control budget)88% use multiple face-to-face meetings to rolloutproducts
69% of companies spend >3 months to launch
products (42% over 5 months)66% of companies launch 5 or more products/year(45% - 10 or more)
WHY LAUNCHING STRATEGY?
Source: Eloquent Market Survey, 2001
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WHY DOES IT MATTER?
Newinnovations
Increased
Competition
More,Complex
Products
More channels
Less time to
sell
Eroding Margins
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Always start with the consumer. Do consumers want/need this product?
Assess the opportunity:Size of the marketHow big is the consumer need?CompetitionHave they entered? Are they likely to?
Estimate of your market shareWill this product have a fast adoption rate?Cost/ease of entry (capital investment and manufacturing, branding, distribution, company
skills, etc.)
Identify consumer segments, and choose your target (Think STP)
Determine your positioning: Choose one singular benefit that you intend to deliverto your target consumers. Positioning should be differentiating versus competition.
Determine marketing strategy for new product (Think 4Ps)
Priceset to reflect positioning (premium, popular, or value) and drive profitProductwhich attributes to offer (flavor, size, etc.)Promotionhow will you create awareness and trial of product (advertising, coupons,
sampling, product demos, etc.)Placementwhere will consumers buy product (grocery, mass, drug, club, convenience,
etc.)
NEW PRODUCT LAUNCH
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Customer Acceptance Measures (Customer
aceptance/use; customer satisfaction; revenue; marketshare; unit volume)
Financial Performance (time to break even; margin;
profitability/ROI)Product level performance (product cost; time to launch;
product performance; quality guidelines)
Other (nonfinancial measures peculiar to the new
product being launched; example: competitive effect,image change, morale change.
MEASURED GOALS
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Positioning: Always choose a price that reflect your brands positioning.
Premium vs. Popular vs. Value/Fighter brand (private label)
Elasticity: Elasticity tells you how responsive/sensitive your brands sales are to
changes in price. Use elasticity to analyze how pricing changes will impact yourbrands volume and profit.
Elastic (commodity products) vs. Inelastic (differentiated products)
Cost Structure: Always consider costs when analyzing pricing. Clearly, revenuesshould exceed costs and the brand should be profitable.
Profits = RevenueCosts
Pricing Strategies/Considerations: Keep your brand plan & goals in mind whendetermining your pricing strategy!
Perceived customer value, markup, going rate/comparative, discriminatory, bundling
PRICING
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You are a BM at Nestle, and the company is consideringlaunching a new chocolate-flavored KitKat product. What
factors/issues would you consider to make the decision to
launch and subsequently introduce the product?
You are charged with marketing a candy bar in Indonesia
which has been very successful in the UK. What things
should you consider in bringing the product to Indonesian
market?
Give me an example of a recent new product launch that was
well done.
NPL DISCUSSION
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How viable is this threat? Assess the threat to determine whether or not youneed to defend:
Does the new product meet a consumer need? Will anyone buy this product?How strong is the competitor? Will they spend to support the launchare they smart
marketers?Where will they take volume from? Are they targeting you or your competitors?
Should you decide it is necessary to defend, there are some strategies to
consider (Think 4Ps):
Reinforce equity with advertising/promotionremind consumers why your product isbetter than new competitordont give them a reason to try.
Product upgrade to provide new benefitnever give consumers a product-based reasonto switch.
Load consumersprovide price incentives so consumers will be stocked up with yourproduct when a competitor launches (aka Pantry Loading).
Track new competitors performance after launch to see if it is successful.
NEW COMPETITOR
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Build your equity: Use advertising to communicate quality/image of
branded products to consumers. Establish a point of difference versusprivate label. Customers must understand the enhanced value of the brand.
Innovate: Increase product quality or innovate by introducing new flavors,scents or choices.
Manage the price gap: Consider a price sensitivity analysis. Determine howmuch of a premium you can afford to charge before your brand starts losing
volume to private label (in essence, quantify the value of your brand to
consumers).
Introduce a value brand: Larger companies that have more than one brandcompeting in a given category could position one brand as a value brand tocompete against the private label. This offers consumers a branded option
at a lower price.
NEW COMPETITOR - PRIVATE LABEL
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Is the decline driven by a general category decline or a sharedecline on my brand? These drivers lead to very different
strategies for reversing the decline:
Why is my category declining?
Changing consumer needs/habits/trends (health, convenience),macroeconomic factors
Why is my share declining?
You changed something or your competitors changedsomething (new product substitutee.g. bleach usage declined
when Tide w/ bleach was launched)?
DECLINING SALES
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If category is declining, determine strategy to increase category usage:
Increase frequencybrush after every meal instead of in themorning/evening
Use more per usage occasionfor whiter whites use a full cup instead ofhalf
New product usese.g. recipes
Expand across categories
If share is declining, determine why. Explore 4 Ps for yourself and yourcompetitors:
PriceChanges? Temporary or permanent? Reasonlower costs, inventory,steal share, etc?
ProductHas the quality changed? Any new products/upgrades? SKUrationalization?
PromotionHave promos/advertising changed? Message?
PlacementHave I lost distribution? Have competitors gained distribution?
DECLINING SALES
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Productbundle of benefits
Offered to a market
For attention, ownership, use or consumption
Satisfy a need or want
Object, service, place, organization or idea
PRODUCT STRATEGIES
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Pure tangible good (soap)
Tangible good augmented by service(s)
Clothes, camcorder
Hybrid offerequal parts product/service (custom suit)
A service with accompanying goods-
Airplane trip
An intangible benefit -(doctors appt)
PRODUCTSERVICE
CONTINUUM
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Core Product: core benefit to buyer
Actual Product: quality level, design, brand name, packaging
Augmented Product: Additional services and benefits surrounding the product
PRODUCT ONION
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Consumer Products
Industrial Products
Organizations, Persons, Places and Ideas
Organization: Unicef, WALHI
Persons: Roy Suryo, Paris Hilton
Places: business site marketing and tourism marketing
Ideas: demarketing, green living
PRODUCT CLASSIFICATIONS
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Convenience products
Staples, impulse and emergency
Shopping products
Specialty products
Unsought products
CONSUMER PRODUCT
CLASSIFICATIONS
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Consumer buying behavior: frequency, degree of planning and purchaseeffort; degree of customer involvement; degree of comparison
Price
Distribution
Promotion
ANALYTICAL DIMENSIONS
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Buy it often, little planning or comparison, low involvement
Price: low
Distribution: widespread, convenient locations
Promotion: Mass (by the producer)
Examples: toothpaste, detergent
CONVENIENCE PRODUCT
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Buy it less often, do plan and do compare brands on quality, price, style
Price: higher (than convenience)
Distribution: Selective but still reasonable convenient locations
Promotion: advertising and personal selling by producer and resellerExamples: computer, furniture, clothing
SHOPPING PRODUCT
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Strong brand preference, special purchase effort, little comparison, low pricesensitivity
Price: high
Distribution: one or a few outlets
Promotion: carefully targeted by producer and reseller
Examples: luxury and some hobby goods
SPECIALTY PRODUCTS
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Little awareness or interest until needed; often negative interest
Price: varies
Distribution: varies
Promotion: Aggressive ads and personal selling by producer/reseller
Ex: funeral home, dental services
UNSOUGHT PRODUCT
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A company.must choose a launch strategythat is consistent with its intended positioning.
The launch strategy should be the first step in agrand plan for life-cycle marketing.
Philip Kotler
Marketing Management
THE IMPORTANCE OF LAUNCHES
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Does your product launch plan reflect all of the money
and time put into developing the product?
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85% of new B2B products are failures
95% of new consumer products are failures
Failures = doesnt meet company objectives, withdrawn from market within
12-18 months
SOME FACTOIDS
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Source: New Product News
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Positioning Strategy Process
Positioning Strategy
Statement
Technology and Total
Product Roadmap
Partnerships
Total Product
Assets
(Functional) Programs
Business Model
Market Entry CustomerSegment Critical Need and
Total ProductRequirements
Company Total ProductSolutions Potential
Differentiators
Competitors Total ProductSolutions Potential
Differentiators
CompanyDifferentiator
Barriers to
Adoption
Market
Drivers
Customer/End-User Problem(s)
Definition
Mission
Statement
Applications
Technology
Enablers Customer Segments
Critical Needs
Company Product/
Service Match
Market Entry Customer SegmentRoadmap and Market Segment
Leadership Roadmap
Market Segment
Product/MarketCategory
Market Vision Market/CustomerSegmentation Competitive Differentiation Strategy Evidence
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Unite company around shared objective: making the launchsuccessful
Provide strategy evidence of the companys intent, and right, tobe a market segment leader in product/service category
Build independent third-party validation, and strategy evidence,of positioning strategy
Start the buzz, market pull with a consistent messagearchitecture
Support long leadtime sales cycles
Facilitate fundraising
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LAUNCH OBJECTIVES
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Establish core technology/system as an extensibleplatform for future products and partnerships
Establish broad-based awareness and credibility withproduct customer segment
Generate market momentum/Accelerate the sales cyclefor Product iPad; delay customer purchase commitments
to competitors
LAUNCH OBJECTIVES (CONT)
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Type of demand sought:- New-to-the-world, develop entry strategy with emphasis
on stimulating primary demand for the product category (iPad)
- Product improvement, to achieve customer migration, tostipulate replacement deal.
-Line addition, stimulate selective demand
Permanence (stay, stay if meet the goals, temporary)
Agressiveness (agressive, cautious, balanced)
Competitive advantage (differentiation, price, or both)Product line replacement
Competitive relationship
Scope of market entry
Image
STRATEGIC PLATFORM DECISION
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Segmentation (end-use; geographic & demographic; behavioraland psychographic, benefit segmentation)
Micromarketing & mass customization (loyalist, rotators on
alternative sets, deal-selective, price-driven, store brand buyers,light users)
Diffusion of innovation
Product characteristic (relative advantage, compatibility,
complexity, divisibility, communicability)
TARGET MARKET DECISION
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Buyers should buy our product rather than others being offeredand used because:....................!
Attribute (a feature, function, benefit)
Feature, the car that cant make you lost (with a GPS ready)
Function, shampoo that coats your hair with athin layer ofprotein
Benefit, saves your money.
PRODUCT POSITIONING
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Trademarks & registration
Thinks of a good brand name
Avoid brand name pitfalls
Manage brand equity
BRANDING & BRAND MANAGEMENT
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Why?
Complex problem/solution = market education
Big budget line item product = long budget cycle, complex buying process
Competitive pressures
Need market buzz for funding round
Risks?
Too much competitive information, too early
Market environment can change substantively
Product development slips
Obsolete an existing productAnalysts/Media wont cover the real deal
PRE-ANNOUNCING A PRODUCT?*
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Often executed as a crescendo launch, a series of targeted announcements leading up to
product launch
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Do
Describe key elements of technology
Explain benefits of technology/potential applicationsenabled
Articulate initial total product assumptions (services,standards, partnerships, etc.)
Dont
Name product, provide specifications
Announce pricing
Provide precise launch date
PRE-ANNOUNCING TIPS
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Positioning Strategy Statement and Message Architecture
Objectives and Strategies
Competitors/Competitive Response
Market leverage/Influencer plan
Sales training and lead generation (closed loop)
Marketing programs materials
Schedule/Timeline
Momentum milestones
Appendix
- positioning toolkit
- customer segment profile
- buying decision process
LAUNCH PLAN OUTLINE
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Positioning Toolkit
Sales, channel strategy Product Release schedule
Programs Ads, site sponsorships CD, Flash demo Customer seminars
Data sheets, application notes Direct mail, e-mail, list promotions Newsletters Sales, channel launch; training Trial, swap-up program Trade shows, conferences, events; suite briefings Advance press and analyst tour
Speaker program Regional field sales champions User groups, customer councils Webcasts/Webinars with guestexperts: customers, analysts, partners
Lead management systemsales force
Materials Brochures Data sheets, application notes Presentations Price lists Product catalogs Product demonstrations Product roadmap
Press releases Technical articles Technology, company backgrounders Testimonials White papers Web site update
Launch Checklist: Some StrategyEvidence Options
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LAUNCH MANAGER IS COMMAND AND CONTROL
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Launch
Program
Manager
Creative,
Website,
Interactive
Marketing
Product
Development/
Technical
Marketing: Data
Sheets & Demos
Press/Analyst
Relations,
Materials
Production
Strategic
Partners, Investor
Relations
Shows,
Conferences,
Events
CTO/Guru:
White Papers,
Simulation
Strategies
Sales:
Customer
Advocates
Content
Weekly Status and
Project Management
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LAUNCH RESPONSIBILITIES
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Launch Strategy
Marcom: Creative, Website,
Interactive Marketing
Product Marketing:
Data Sheets & Demos
Marcom: Press/Analyst
Relations, Collateral
Biz Dev: Strategic PartnersMarcom: Tradeshows,
Conferences, Events
CTO/Guru: White Papers,
Simulation Strategies
Sales:Customer AdvocatesContent
Finance: Investor RelationsProduct Development:
Product Availability
Launch Manager and Champion
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Market Segment
SALES
T
ARGET
PA
RTNERS
IN
DUSTRY
AN
ALYSTS
AN
ALYSTS
TRADE
PRESS
MarketEntry
Customer
Segment
Company
BUSIN
ESS
pRES
S
E
DITORS
AC
COUNTS
CHANNEL
FINANCIAL
EDITORS
Validation
Education
INVESTORS
Developing Strategy Evidence: MarketLeverage Model
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MARKET LEVERAGE/INFLUENCER PLAN
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Category Names Relationship/Objective/Program Company Owner
Investors
Sales Channel
Beta Customers/
Targeted accounts
Industry Partners,
Leaders, Gurus
Industry Organizations
Industry analysts
Financial analysts
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Launch planning starts too late in product development process
Positioning strategy half-baked and untested, externally
Not enough (credible) strategy evidence: bug-free product, the rightatleast one Tier 1 - customer testimonials and references (negotiated into
contracts), application notes and documentation, channels, customersupport
Proper market foundation has not been laid, no one has heard of thecompany or product
A non-programmatic approach (escapes vs. launches): lack of launchmanager, market leverage and message models, launch objectives,plan, measurable goals
Lack of fully integrated plan (from product management to marketingcommunications to product development)
LAUNCH PITFALLS
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Validate size of market andpositioning as foundation for plan
Build consensus on key messages
Give yourself lead time to createsales tools
Technology, solution partners play a
larger role today
HINTS: START YESTERDAY!
Develop the Launch Plan Early
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Leverage Cross-Functional Team Expertise
Development
Product marketing
Sales (U.S., Intl)
Technical salesStrategic partners
PR, MarCom
Customers
Support
HINTS: IT TAKES A VILLAGE TO RAISE A
CHILD OR LAUNCH A PRODUCT!
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Launch manager
Oversee process
Subject Matter Experts
Create content: Author white papers, presentations, webcasts to ensuremessage consistency
Sales management, friends and family analysts, customersand partners
Bullet-proof launch messages, content, and delivery prior to general releaseEarly indicator of product success in market
Pre-define roles and responsibilities for all
HINTS: LEVERAGE CROSS-
FUNCTIONAL TEAM EXPERTISE
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Know Your Audience (and they dont think like you!)
Sales: what it takes to win individual deals; dont naturally sell newstuff
Marketing: best way to capture a market segment
Walk in Their Shoes
Spend time with the telesales group for a day
Make a few cold calls to see what works and what doesn't.Shadow a sales rep through an entire sales cyclefrom the first call tosigning the papers. You'll learn first hand what it really takes to get a
deal done.
HINTS: SALES IS FROM MARS
MARKETING FROM VENUS**
Source: TopLine Strategy Group
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Wheres the beef ?Keep It About the CustomerAnswer 4 Basic Questions*
Who am I selling to?
Why are they buying anything?What do I have to sell them?
Why would they buy from me?
Reinforce key messages
No more than 3 key sub-messagesBe creativebut make it meaningful
Repeat throughout
HINTS: GET TO THE POINTFAST
ce: Customer Message Management Forum
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Different needs for:
Domestic and international launches
Field sales, inside sales, channel partners, distributors, technical
sales, service and support76% of companies tailor messages
For each audience
Customize the message to what they care about
Tailor delivery with a blend of tools
HINTS: ONE SIZE DOESNT FIT ALL
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Create a comprehensive self-service information center
Supports multiple forms of content
Live events, help center, reference materials, samples, simulations..
Accessible online and remote
Plan for peak usage, not average
Based on typical user desktop, no special requirements
Dont expect the field to learn a new process easily
LESS is MORE!Refrain from adding extra information
Make everything easy to find
Delete outdated information
HINTS: KISSKEEP IT SIMPLE STUPID
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WHY LAUNCHES CAN
MAKE YOU CRAZY
(educate, announce,certify,)
(Web, CD, face-face
PDA, Document)
(presentation, web cast,press releases, demos,..)
Multiple
Objectives
Multiple
Tools
Multiple DeliveryOptions
(Customers, sales, resellers,
distributors, integrators)
MultipleAudiences
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Start with the customer presentation, messaging
Gain consensus on the target, value proposition, features
Integrated communication programsRe-examine at the list of whats needed each timeMultiple-activity communication campaigns
Build sales and channels into the programs
Communications content for all audiences managed togetherMake it easy for subject matter experts to create, submit and update
content into single framework
HINTS: INTEGRATED PROCESS
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SUMMARY AND WRAP-UP
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The Launch Plan is the chance to get the company and product off to
a good start in the market!
Make it clear and execute it creatively.
PRODUCT LIFE CYCLE
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PRODUCT LIFE CYCLE
Time
Product
Develop-ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
I d i S f h PLC
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Introduction Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awarenessand trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among earlyadopters and dealers
Growth Stage of the PLC
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Growth Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in themass market
Maturity Stage of the PLC
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Maturity Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defendingmarket share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
Decline Stage of the PLC
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Decline Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk the brand
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitableoutlets
Advertising Reduce to level needed to retainhard-core loyal customers
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THANK YOU