Marketing Strategy and Competitive Positioning pdf ebook

Figure 11.4 
The product life cycle
Sales and profit 
Time
Pre-launch
Introduction
Launch
Growth
Maturity
Decline
Loss
Profit
Sales

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CHAPTER 11 COMPETING THROUGH THE EVOLVING MARKETING MIX
of success. Classic examples include the launch of new movies or new car models, where 
high advertising spend prior to and during launch excites interest and stimulates demand. 
The launch by Apple of its watch in 2015 was attended by significant media coverage.
Introduction
The introduction phase following launch is crunch time for the new product. Many new 
products do not get beyond this phase. During the introductory phase sales begin to take 
off but expenditures on marketing remain high to establish the new product as a superior 
alternative to previous offerings.
It is at this stage that competitors are likely to take increasing interest in the new product, 
attempting to gauge whether it will be a success, and hence present opportunities for copy 
or further improvement, or a costly failure. As the success of the new product becomes more 
certain, so competitive products will begin to appear as ‘me too’ products or improvements 
on the market pioneer. In the consumer tablet computer sector, the pioneering iPad was 
soon joined by models from Samsung, Sony, Amazon and others.
Growth
The growth phase of the PLC is often considered the most exciting. Most brand and mar-
keting managers prefer to operate in growth markets. At this stage the product is becoming 
readily accepted on the market, sales are growing rapidly and returns begin to outstrip 
expenditures. Other things also happen during this phase that significantly affect market-
ing strategies. First, the success and growth are likely to attract more competitors into the 
market – especially those that have adopted a ‘wait and see’ attitude during launch and 
introduction. Now that the market is proven, risks are lowered and potential returns beckon.
With further competitor entry comes greater product differentiation among offerings, 
and typically greater segmentation of the market. The early majority, the new macro-target, 
are likely to be diverse in their exact wants and needs, offering greater opportunities for 
micro-targeting. Expenditures continue to be high in researching market opportunities 
and product improvements, second generation and so on. In the MP3 player market, for 
example, by Christmas 2006 there were several different versions of the iPod available 
(from Shuffle to Nano to Video). For Apple, a problem began to emerge as the innovators, 
primarily younger and more fashion-conscious purchasers, saw their parents’ generation 
buying the bigger, 60GB iPod Videos. In response, Apple launched coloured versions of the 
iPod Nano, with additional add-on features and skins, to retain the younger market. It is 
relevant to stress that iPod’s sales peaked in 2008 after which it was replaced by the iPhone 
and other smartphones as the platform of choice.
It is at this stage that returns peak and surplus cash can be diverted into developing and 
launching the new generation of new products (see portfolio theory section).