As a tow truck or any other business marketer, it is important to understand how your marketing tactics and strategies will change depending on the stage your company is in. A brand new product will market differently as compared to an already established one. For a new product, marketing will be focused on raising brand awareness. For any product, it goes through different stages, right from the time is it produced, enters the market to the time it exits the market.
Product Life Cycle
A product life cycle is a cycle that a product goes through from its development to decline. It is normally broken up into different stages. Business owners and marketers use the product life cycle to make important and informed decisions on aspects such as advertising budget, product pricing as well as packaging.
Here are the stages of a product life cycle you need to understand.
the development stage of a product life cycle involves the research phase before a product is introduced to the market. It involves a time companies bring in investors, develop different prototypes, and test the effectiveness of a product and come up with a strategy for the launch. Due to the nature of this stage, companies find themselves spending a lot of money without necessarily bringing in much revenue. The duration of this stage will be depended on the complexity of the product as well as competition.
The introduction stage happens when a product is first launched in the market place. It happens when marketing teams build product awareness and reach out to potential customers. Typically, when a product is being introduced, sales are low and demand starts to build slowly. This phase is heavily focused on advertising and marketing. Companies work to build their brand and work on testing distribution channels as well as educating their potential customers about their products.
During the growth stage, customers have already accepted the product on the market and are fully buying. Demand for the product is growing and profits are kicking in. During this phase, marketing campaigns will normally shift from getting customers to buy-ins of the established products. Companies work hard to continue building and growing their brand, as well as keeping their reputation. Additionally, as companies grow, they will begin to open new distribution centers.
The maturity stage is normally when sales being to level off from a rapid growth period. At this stage, companies will begin to reduce their prices so that they can stay competitive among the growing competition. At this stage, a company continues to become more efficient and learn to improve from mistakes done from previous stages. Marketing is normally focused on differentiation rather than awareness.
The last two stages are maturity and decline. During maturity, competitors have begun to take a portion of your market and a product will experience neither growth nor decline. Most consumers will be using the product but there will be many competing companies.
The last stage is the decline. If a product doesn’t become the preferred brand in a market place, you will typically experience a decline.