Chapter 15 Chapter 13 Designing Marketing Strategies for Periodic Products

Most discussions of product life cycles describe a typical tea as a neutral curve.This curve is divided into four stages: introduction, growth, maturity and decline. After a product enters the market, its sales volume and profit will change over time, presenting a process from less to more and from more to less, just like human life, from birth, growth to maturity, and finally to decline , This is the product life cycle phenomenon, that is, the product life cycle.The so-called product life cycle (PLC) refers to the market life cycle process experienced by a product from entering the market until it finally exits the market.A product's market life cycle begins only after it has been researched and developed, tested for sale, and then entered the market.When a product is withdrawn from the market, it marks the end of the life cycle.

With the rapid development of economy, paying attention to environmental protection and governance has increasingly become an inescapable responsibility of modern enterprises.When working on environmental protection, Nokia starts from the consideration of the entire product life cycle, and reduces the negative impact on the environment throughout the product life cycle. Specifically, a product has gone through multiple processes from birth to demise, including research and development, raw material procurement, manufacturing, final product, product use, and final disposal.Take Capitel Nokia as an example. In these processes, Capitel Nokia must consider environmental protection in all links to reduce the negative impact of products on the environment.

In the product development stage, Nokia has given full consideration to factors such as whether the product complies with environmental laws and regulations, the substitution of toxic and hazardous substances, the amount and efficiency of raw materials used, and the energy consumption in the process of manufacturing and use; In the procurement of raw materials, Nokia effectively manages the environmental performance of suppliers. Only suppliers that meet Nokia's environmental protection requirements can become qualified suppliers; while the manufacturing process must meet the requirements of the environmental management system and be certified by authoritative organizations; In the final waste stage of the product, it is necessary to fully consider how to recover, recycle and properly dispose of it, so that resources can return to the material chain.The above-mentioned links are coordinated and integrated, so as to truly form a closed-loop system and complete the entire life cycle of a product.

The product life cycle can be used to analyze a product category, a product form, a product or a brand, and even like Nokia, it can be used to analyze its decision-making in a certain aspect (environmental protection). For enterprises, the product life cycle provides A set of applicable marketing planning perspectives.It divides products into different strategic periods, and marketers can adopt different marketing mix strategies according to the different characteristics of each stage.In addition, the product life cycle only considers the two variables of sales and time, which is simple and easy to understand.

However, we should also pay attention to the fact that the product life cycle is not perfect. When using product life cycle analysis, we should also pay attention to the following issues: 1. It is not easy to confirm the criteria for dividing the starting and ending points of each stage. 2. Not all product life cycle curves are standard S-shaped, and there are many special product life cycle curves. 3. It is impossible to determine whether the product life cycle curve is suitable for a single product item level or a product collection level. 4. This curve only considers the relationship between sales and time, and does not involve other variables that affect sales such as cost and price.

5. It is easy to cause "marketing myopia", thinking that the product has reached the recession period and prematurely removing good products that still have market value from the product line. 6. Product decline does not mean that it cannot be reproduced.With appropriate improvement strategies, companies may recreate new product lifecycles. In the following sections of this chapter, we will introduce the marketing strategies that companies need to adopt in different life cycles of products. Because mass production of new products and channel development take time, sales growth tends to be slow.

When a new product is put into the market, it enters the introduction period.At this time, customers do not know the product yet, only a few customers who pursue novelty may buy it, and the sales volume is very low.In order to expand sales, companies need a lot of promotional expenses to promote their products.At this stage, due to technical reasons, the products cannot be produced in large quantities, so the cost is high and the sales growth is slow. Instead of making profits, the company may lose money.In short, in the introduction stage, enterprises may face greater resistance. The 1950s was the era of popular sneakers, however, in the United States in the 1960s, it was the world where "silent puppy" pigskin slippers were all the rage.

U.S. Auer Feilin Global Co., Ltd. (hereinafter referred to as Feilin Company) was a supplier of leather and leather shoes before 1903. After 1903, the company began to engage in the production of leather and leather shoes. Before 1950, the company's main products were horse hide and shoes made of horse hide.Later, due to the shortage of horses, the company decided to develop pigskin instead of horse hide.Shoes made of pigskin are more comfortable to wear, and are sweat-proof, moisture-resistant, and not easy to deteriorate. More importantly, pigskin is abundant in resources.Therefore, Feilin Company took the lead in using pigskin to make shoes by virtue of its own experience in making various leathers.

According to the needs of potential customers, the company decided to invest its footwear industry in the comfortable leather shoes market. In 1957, they produced men's loafers in 11 colors, with a combination of sole and upper, and tested them in rural and small towns with great success.By 1958, the shoe was named "Silent Puppy", which meant that the shoe was very light to wear and walked without any sound. At the same time, the company also designed a dog with melancholy eyes and drooping ears. The bantam as an advertising sign.Since then, this new product was born. As a result, Ole Flynn became the first company to make shoes from pigskin in large quantities.

Aur Ferring, which is in the product introduction period, naturally also encountered difficulties at this stage: the "Silent Puppy" pigskin leather shoes are not well-known, and their market share and sales growth rate are very low. "Silent Puppy" also encountered this difficulty. At the same time, it also faced difficulties in changing its target market and channels, because the company's original products were mainly horse leather shoes, which were sold to farmers. The shoes were characterized by strong, acid-resistant, Now "Silent Puppy" emphasizes comfort, and its consumers are farmers in cities and suburbs. Therefore, the original sales points, sales networks and salesmen cannot adapt to this culture.

In response to the above two difficulties, Feilin company has adopted the correct promotion strategy.First, it strengthens the advertising campaign.Its "Silent Puppy" shoe advertisement was mainly published in the "This Week" magazine sent to 35 cities, and the sales manager was notified: if 600 new retail outlets can be set up in 35 cities within 6 weeks, the company will approve 17% of sales are used for its advertising budget.Secondly, in August 1958, the company transferred back the sales personnel scattered in various places. After more than one month of training, they were sent to 35 cities to concentrate their efforts and set off a sales climax of "Silent Puppies".All the salesmen work ecstatically. Each of them brings 11 samples of shoes in different colors to show potential customers how pigskin shoes are acid-proof, rain-proof and stain-proof. opened. Each product has a life cycle of indeterminate length and character.At each stage of a product, marketers face different challenges. During the product launch period, "Silent Puppy" increased the popularity of the product and opened up sales through advertising. In the product introduction period, because the new product has just been put on the market, the enterprise has two difficulties.On the one hand, consumers and dealers do not understand and distrust new products, and are wary.On the other hand, the production of new products in this period has not yet been finalized, whether it is the equipment and technology used, or the proficiency and specifications of the workers' operating techniques, and there are many problems.At this time, the product quality is unstable and the cost is high.This in turn increases consumer and dealer distrust of new products.As a result, many new products died at this stage. At this stage, the products are sold to early adopters, who have a strong mentality of seeking novelty and differences.Pricing in the introduction period generally adopts high-price strategy, low-price strategy or satisfactory pricing, and according to demand and competition, appropriate use of marketing methods such as installment payment, special offers, free samples, and price discounts to expand sales channels and promote sales growth . At the same time, during this period, enterprises should actively collect market responses to new products according to the characteristics of the products in the investment period, vigorously carry out advertising campaigns, clear sales channels, and do everything possible to open up sales. The specific strategies include: 1.Take advantage of existing product support.For example, give free gifts along with existing related products that have already won praise from customers; combine new products with existing products for sale; use existing product labels, materials or advertisements to promote new products, or combine new and old products for display, etc. 2.Use special means to induce trial.For example, new products will be provided free of charge for a period of time; special offers or free demonstrations or trials at consumers' premises; free teaching of use and maintenance techniques, etc. 3.Use special means to induce middlemen to distribute.For example, consignment or other means are adopted to reduce the risk of middlemen purchasing goods; to give middlemen exclusive distribution rights; to provide advertising subsidies; to send personnel to assist in sales or to train salespeople for them, etc. 4.Take advantage of other promotions.Such as large-scale advertising and other methods of stimulating purchases, trying to make certain prominent figures in relevant groups use their products and publicize them. The growth stage is marked by rapid sales growth.Early adopters love the product, and other consumers start buying it.Attracted by the market opportunity, new competitors enter the market, introducing new product features and expanding distribution channels. If a new product can satisfy the market, it can enter the growth stage.After a new product has gone through the market introduction period, consumers are already familiar with the product, consumption habits have been formed, and the sales volume has increased rapidly. These characteristics all indicate that the product has entered the growth period. Products that have entered the growth stage have begun to have some repeat customers and more and more new customers.Product sales surged during this period, and corporate profits grew rapidly.With the increase of sales volume, the production scale of enterprises is also gradually expanded, the cost of products is gradually reduced, and new competitors will enter the competition.As competition intensifies, new product features begin to emerge, product markets begin to be segmented, and distribution channels increase. It took 3 years for "Silent Puppy" to go from being sold to becoming a famous brand.During these three years, the company's advertising expenses increased sharply, and the average advertising expense was generally 7% of sales. In 1961, "Silent Puppy" had become a household name. Since the supply of "Silent Puppy" began to fall short of demand during this period, Flynn raised the price from $7.95 per pair to $9.95, and at the same time identified key distributors. By the end of 1962, Silent Puppy further developed the style of shoes, not only launched women's slippers, but also developed various pigskin slippers for children over 5 years old.Sales soared during this period, but demand remained short, with workers working three shifts a day and buyers scrambling to get more pigskins. In the period of product growth, Silent Puppy shoes expanded the product line, launched women's shoes, children's shoes, and expanded the scope of advertising to make "Silent Puppy" a famous brand in the United States. The growth period is a good stage for profit. Due to the rising market demand and not many competitors, the company can maintain a relatively high price and profit. The price in the growth period is usually high, the sales volume is large, and the average profit level should be higher than that of imported products. period, recession, and even maturity. In the growth stage, enterprises should pay attention to the use of pricing strategies and pricing techniques.For example, if a product with a high price strategy is implemented during the introduction period, the price can be appropriately reduced to attract potential consumers; or if the product is implemented with a low price strategy during the introduction period, if the popularity increases, the price can be raised to obtain a higher price profit per unit product. In the product growth period, the core of the company's marketing strategy is to extend the product growth period as much as possible.Specifically, the following marketing strategies can be adopted: 1.Pay close attention to product quality, work hard on the word "good", improve the quality assurance system, cooperate with it with good packaging and decoration and perfect service, and strive to create high-quality brand-name products. 2.Further expand the sales outlets, penetrate the market and open up the market, adapt to the needs of the majority of customers, and increase sales. 3.Strengthen advertising, and shift from introducing products to establishing product images, further expand product popularity, strive for famous brands, and strengthen sales services. Enterprises adopting some or all of the above market expansion strategies will strengthen the competitiveness of products, but will also correspondingly increase marketing costs.Therefore, at this stage, companies are faced with the choice of "high market share" or "high profit margin".Generally speaking, the implementation of the market expansion strategy will reduce the immediate profit, but it will strengthen the market position and competitiveness of the enterprise, which is conducive to maintaining and expanding the market share of the enterprise. From the perspective of long-term profit, it will be more conducive to the development of the enterprise. The sales growth rate of a product will slow down after reaching a certain point, at this time, the product will enter a relatively mature stage.The duration of this stage is generally longer than the previous two stages, and contacting marketing management brings the most difficult challenges to deal with. We all know that once a new product is launched, its sales volume and profits in the market will change over time.Kotler believes that when the product sales growth reaches a certain point and gradually slows down the sales growth rate, we believe that the product has entered a mature period.The maturity period is generally longer than the previous stages, and at the same time, the maturity period also poses challenges to marketers. In 1963, the growth rate of sales slowed down, and the product began to enter a mature stage. The company and advertisers began to investigate in detail the information on consumers' purchase of "Silent Puppy" loafers. The survey found that 61 percent of adults are aware of the Silent Puppy loafers, but only 10 percent have bought a pair.Buyers of Silent Puppy loafers tend to have higher average incomes and higher levels of education.According to the survey, among all the respondents who bought silent puppy shoes, 51% had an annual household income of US$5,000-7,500; 28% had an annual household income of US$7,500-10,000; Level), most of them are professionals or skilled workers, the main reason for buying is because "Silent Puppy" is comfortable, light and durable to wear.Since then, the company has truly understood the main reasons people buy the Silent Puppy loafers, as well as the buyers' income and education level. Therefore, for the target consumer groups, the company adopted the following strategies: First, continue to expand the scope of advertising.Vigorously promoted in various newspapers and magazines. Since 1964, TV advertisements have been adopted, and advertisements have been advertised in the two prime-time columns of "Today" and "Tonight". At the same time, 13 magazine advertisements have been added to further expand the influence to new target markets. Secondly, emphasizing that the characteristics of "Silent Puppy" shoes are comfort, and in 1965, the slogan of "Put on Silent Puppy loafers to make sidewalks softer!" was launched. Again, continue to expand sales channels and develop new retail outlets.At this time, it had 15,000 retail outlets, mainly shoe stores and department stores. At the same time, it also made some very powerful competitors become the largest buyers of Felin's company. shop for sale. Later in this period, due to higher costs, the product price rose to $11.95, but because the shoes were of good quality and cost less than competitors, the total sales volume still increased. In 1965, the sales and profits of "Silent Puppy" have reached their peak. After the mature stage of breastfeeding, Silent Puppy Slippers decisively adopted scientific investigations to establish its own target customer group, thus further expanding its market and creating a new peak in the market.Marketers also suggest that when a product enters a mature stage, due to the climax of price competition and non-price competition, the prices of competitors will gradually converge. At this time, companies should flexibly adopt pricing methods to stabilize sales and profits according to differences in demand. Kotler pointed out that during this period, some weaker small and medium-sized enterprises began to be eliminated, and finally only defensive enterprises remained in the industry.Enterprises can extend the maturity period or recycle the product life cycle by adjusting the market, product and marketing mix strategies. Adjust the market.This strategy is not to change the product itself, but to discover new uses of the product or change the way of marketing, etc., so that the sales of the product can be expanded. Adjust the product.This strategy uses changes in the product itself to meet the different needs of customers and attract customers with different needs.Any level of improvement in the overall product concept can be considered a product relaunch. Adjust marketing mix.That is, through the comprehensive reform of the four marketing mix factors of product, pricing, channel and promotion, the recovery of sales volume will be stimulated.For example, while improving product quality, changing product performance, and increasing product designs and varieties, at the same time, reduce prices and make profits through special offers, early purchase discounts, subsidized freight, and deferred payments; expand distribution channels, set up sales outlets, adjust advertising media mix, and change advertisements Time and frequency, increase personnel sales, strengthen public relations and other "multi-pronged" measures to penetrate the market, expand influence, and win more customers. Unfortunately, most companies fail to develop a well-thought-out policy for dealing with their aging products.In Asia, China has experienced a possible reluctance to admit to the failure of a product line, especially one produced with their consent.However, unless there is a strong reason to do so, continuing to run a weak product is very costly for the company. The life cycle of a product depends on the market, not on the quality of the product itself.If the market no longer needs a certain product, even if it is just produced, even if its quality is very good, it has no life.To give a simple example, in today's cities, cars are running. If you produce horse-drawn carriages, there will be no vitality in the city, even if your horse-drawn carriages are very beautiful and of high quality.Therefore, enterprises should make reasonable decisions about products entering the recession stage. Since 1966, the total sales volume and profit of Silent Puppy loafers began to decline year by year, especially the annual sales growth rate showed a sharp decline. In 1966, it dropped by 12% compared with 1965, and the profit also dropped by 21%. , by 1968, the situation was even more serious.Sales have plummeted even more, making it impossible to believe the glory of the past.In addition to the factors of more intense competition and rising raw material costs, the main reason is that consumers seldom repurchase, because after a period of time, customers do not like to wear shoes as often as new customers who just bought them. At the same time, the quality of shoes Very good, not easy to wear out, so it will affect the purchase of new shoes. The company's survey of men's shoes consumers shows that 60% of the people who buy "Silent Puppy" shoes think they are comfortable, and 47% of the people who don't want to buy them are because they don't like its style. The shoe survey yielded similar results. The company's managers are troubled by the decline in sales. They still think that the feature of the silent puppy loafers should be comfort. The form of advertising also needs to be considered.But one thing is certain, that is, the product style must be updated. The operators of Auer Feilin gradually realized that it is time to develop a new breed, maybe it is a "silent big dog" or maybe a "sounding pug". People will wait and see, but one thing is for sure, the original "silent dog" "Puppy" should retire from the stage of history. In this way, step by step, the people of Feilin made enough money as the "Silent Puppy" grew, matured and declined. When "Silent Puppy" entered the product decline period, it could do nothing but give up.This is also a good move for Auer Feilin Company.The sales of most products and brands will inevitably enter a decline stage in the end.The decline in sales can be slow or accelerated.Kotler pointed out that product sales in a recession can drop to zero, or drop to a certain level and persist for many years. There are many reasons for the decline in sales, such as technological progress, changes in consumer tastes, and increasingly fierce competition at home and abroad, all of which may lead to overcapacity, declining sales, and greatly eroding profits. During the period of recession, the market shows the following characteristics: the sales volume of products has changed from a slow decline to a rapid decline, and the interest of consumers has completely shifted; the price has dropped to the lowest level; most enterprises are unprofitable and forced to withdraw from the market; Enterprises in the market are gradually reducing services attached to products, cutting promotional budgets, etc., in order to maintain a minimum level of operation. When dealing with declining products, enterprises are mainly faced with three decision-making tasks, that is, to determine the products in the declining period, and then decide whether to withdraw or abandon these products. 1.Identify products in recession.To confirm whether the product has entered the recession stage, it is necessary to conduct market research carefully, pay attention to some possible false appearances, and correctly judge whether the product has entered the recession stage. 2.Identify strategies for declining products.Some companies hope that their competitors will withdraw from the industry, while they continue to maintain the product. At this time, the company can adopt three strategies. continuous strategy.Continue to use the same market, channel, price and promotion in the past to maintain sales at a low level, so that the product will decline by itself until it ends automatically. Focus strategy.Concentrate the originally invested resources in some of the most favorable market segments and distribution channels, and shorten the business front, so as to obtain as much profit as possible in the most favorable market. Extraction strategy.Significantly reduce marketing costs to increase immediate profits.Doing so also accelerates the product's decline process. 3.Abandon the decision.A company decides to drop the product from its product range, at which point it faces further decisions: A decision must be made whether to sell or transfer the product to someone else or to discard it entirely. A decision must be made whether to abandon the product quickly or slowly. A decision must be made as to how much to keep in stock of parts and repairs for former customers. A decision must be made whether to advertise to inform customers. Although the concept of product life cycle is widely used in marketing activities, Kotler also pointed out that not all products have an S-shaped life cycle curve, because some products will disappear soon after they are launched, and some products will last for a long time. In the mature period, some products in the recession period can return to the growth period through repositioning and other methods.