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The Product Lifecycle and the Marketing
StrategyEnterprise & Project Management
Please note that these slides are not intended as a substitute
to reading the recommended text for this course.
PLC
Promotional Strategy
Factors that influence price
Implications of pricing
Objectives
1
PLC
2
Strategic Considerations Duringthe Product Life Cycle
3
The promotion strategy is the most visible marketing strategy.
It is designed to get the attention of prospective customers and convincethem to buy from your business.
Promotion is communication intended to persuade, inform, or remind a target audience about a business or its products.
Inspire desire
Initiate action
The promotion strategy involves
– planning,
– determining the right promotional mix,
– and selecting specific promotional activities.
Promotion
4
Advertising
Personal selling (sales)
Public relations and publicity
Sales promotion / Merchandising
Five Promotional Mix Elements
5
Promotion Types
Above-the-line promotion
– Purchasing communication with the consumer – AKA –advertising
Below-the-line promotion
– Short-term incentives to encourage consumers to purchase the product
Ab
ove
-the
-line
Belo
w-th
e-lin
e
Promotions that
are visual &
auditory
TV Ads,
billboards,
radio, print ads
Promotions that
are tactile
Samples,
coupons,
loyalty
programs,
games, price
deals 6
Push / Pull Marketing
7
The Promotional Mix
8
PLC and Promotional Co-ordination
PR X X
Advertising X X X
Direct Marketing X X X
Personal Selling X X X X
Sales Promotion X X
9
Product – Offer a basic product
Price – Use cost-plus basis to set
Distribution – Build selective distribution
Advertising – Build awareness among early adopters and dealers/resellers
Sales Promotion – Heavy expenditures to create trial
Marketing Strategies: Introduction Stage
10
Product – Offer product extensions, service, warranty
Price – Penetration pricing
Distribution – Build intensive distribution
Advertising – Build awareness and interest in the mass market
Sales Promotion – Reduce expenditures to take advantage of consumer demand
Marketing Strategies: Growth Stage
11
Product – Diversify brand and models
Price – Set to match or beat competition
Distribution – Build more intensive distribution
Advertising – Stress brand differences and benefits
Sales Promotion – Increase to encourage brand switching
Marketing Strategies: Maturity Stage
12
Product – Phase out weak items
Price – Cut price
Distribution – Use selective distribution: phase out unprofitable outlets
Advertising – Reduce to level needed to retain hard-core loyalists
Sales Promotion – Reduce to minimal level
Marketing Strategies: Decline Stage
13
Analysis of communication
needs
Selection of promotion tools
Integration into marketing
communications
Implementation of promotional
campaign
Control, comparing
results against objectives
Review and revise
promotional tool
Marketing Coordination
14
No easy formula for pricing industrial product or service
Decision is multidimensional
Each interactive variable assumes significance
Key Components of the Price-Setting Decision Process
Set Strategic Pricing
Objectives
Estimate Demand and the
Price Elasticity of Demand
Determine Costs and
their Relationship to Volume
Examine Competitors’
Prices and Strategies
Set the Price Level
15
Pricing decisions are influenced by various factors
16
Pricing Policy &
Decisions
Customer needs &
Characteristics
Economic Conditions
Cost of the Product
Company Objectives
Competition
Elasticity of Demand
Elastic Demand
Consumers buy more or lessof a product when the price changes
InelasticDemand
An increase or decrease in price will not significantly affect demand
17
Pricing decisions from a company perspective
18
How should products pass from the manufacturer to the final customer?
Channel of distribution: the chain of intermediaries a product passes through from producer to final consumer
PLACE
19
Consumers need easy access to the firm’s product where they can see it, touch it, buy it, return it.
Manufacturers need distribution that provides a wide market coverage.
Retailers need to mark-up the product to cover the costs of sales.
Distribution Channel is Important
20
Direct Selling
Manufacturer to Consumer
Manufacturer Consumer
Product/Service
21
Single-Intermediary Channel
Manufacturer to a Retailer to a Customer
Manufacturer Retailer Consumer
22
Two-Intermediary Channel
Manufacturer to Wholesaler to Retailer to a Customer
Manufacturer Warehouse Retailer Consumer
23