Product Lifecycle, Marketing Communications, and Promotional Strategies
Product Lifecycle
The product lifecycle describes the stages a product goes through from introduction to decline:
- Introduction: Characterized by sluggish sales growth, few competitors, high risk, and low financial return. Strategy: Focus on innovation and quality.
- Growth: Characterized by growth in demand and improved profitability. Greater volatility of competitive enterprises. Strategy: Focus on quality, cost reduction, distribution channels, and launching new versions.
- Maturity: Slowdown in sales and intensifying competition. Strategy: Launch new complementary products, focus on low cost, and enhance communication.
- Decline: A fall in demand/earnings and abandoned businesses. Strategy: Keep the most competitive product varieties.
Integrated Marketing Communications (IMC)
IMC is a management concept designed to make all aspects of communication (advertising, sales promotion, public relations, personal selling, and direct marketing) work together.
Promotional Strategies
- Push Strategy: Give incentives to sellers to “push” your product.
- Pull Strategy: Based on promotions to end consumers (advertising and sales promotion), forcing the consumer to “pull” the product. The seller feels compelled to buy it to satisfy demand.
Advertising and Public Relations
- Advertising: Commercial advertising is a form of paid communication designed to persuade the receiver to take some action, present or future.
- Advertiser: A salesperson whose job is to inform customers about new products.
- Advertising (Unpaid): Relates to any disclosure of the company, its brand, or products in any media vehicle, unpaid and not systematically. “Brown advertising” is what happens when stories are disseminated on payments outside of it.
- Public Relations: An important part of communication, seeking to form a favorable image of the company or disclose its ideas.
Advertising Strategies
- Below the Line Advertising: Uses cheaper means of advertising, such as direct mail, trade shows, exhibitions, and pamphlets.
- Above the Line Advertising: Uses major media: television, newspaper, radio, and cinema.
Promotion and Merchandising
- Merchandising: Specially designed to reach consumers in a position to purchase (or within the vicinity of the outlet), aiming to create maximum product differentiation.
- Sales Promotion: Encourages customers to buy products by offering various incentives.
Objectives of Promotion
- Purpose Charge: Consumers are offered incentives to buy a larger quantity than usual.
- Purpose of Loyalty: Incentives are offered to buyers to remain loyal to the brand.
- Goal Race: Incentives are offered to try a new product.
Types of Promotions
- Open Promotion: A sales promotion that is widely advertised and available to everyone wishing to participate.
- Closed Promotion: Only available for a specific target market of high potential purchase.
Examples of promotions: gifts in packaging, contests, coupons, exposure at point of sale, price incentives, lottery, etc.
Personal Selling
Personal selling is a more personalized form of promotional communication, using a sales team. Mainly used in buying goods compared, specialty, and industrial sales.
AIDA Model
The AIDA model attempts to explain human behavior in relation to the purchase of a product. Stages:
- Attention: Knowing the existence of the product.
- Interest: Being interested enough to notice the characteristics of the product.
- Desire: Having a desire to obtain the benefits the product offers.
- Action: Purchase of the product.