What is the promotional objective for the introduction stage of the product life cycle?

As products move through the four stages of the product lifecycle different promotional strategies should be employed at these stages to ensure the healthy success and life of the product.

Introduction

When a product is new the organizations objective will be to inform the target audience of its entry. Television, radio, magazine, coupons etc may be used to push the product through the introduction stage of the lifecycle. Push and Pull Strategies will be used at this crucial stage.

Growth

As the product becomes accepted by the target market the organization at this stage of the lifecycle the organization works on the strategy of further increasing brand awareness to encourage loyalty.

Maturity

At this stage with increased competition the organization take persuasive tactics to encourage the consumers to purchase their product over their rivals. Any differential advantage will be clearly communicated to the target audience to inform of their benefit over their competitors.

Decline

As the product reaches the decline stage the organization will use the strategy of reminding people of the product to slow the inevitable

Sales promotions are a short-term promotional technique where a company lowers prices to attract more customers and revenue quickly. The product life cycle includes four stages of development all products go through -- introduction, growth, maturity and decline. Companies may use a sales promotion at any point in a product's life cycle, though the reasons vary. Some products are promoted throughout the life cycle, while others are promoted early or late in the process.

Introduction

1. Introduction and decline stages are usually the most consistent points at which sales promotions occur. During the introduction stage, a company launches a product, and sales usually come from cutting-edge buyers or early adopters anxious to fill an unmet need or get the latest gadget. In highly competitive industries, companies often use sales promotions at a product launch to quickly lure customers away from competitors. A new brand of potato chips, for instance, might appear in displays at a steep discount at launch to attract attention from chip consumers.

Growth

1. During the growth phase, the snowball effect occurs, and product sales grow as more customers become aware of its benefits. Promotions are not nearly as common during this stage, because the market generally is aware of the product, and momentum has begun to build. However, products that struggled at launch may still be promoted in early growth stages to provide a spark to sales.

Maturity

1. In the maturity stage, competitors have often entered the market, and the bulk of the customer market has become aware of the product. Sales growth has plateaued. The level of sales promotions in the maturity stage depends somewhat on competition. In highly competitive industries, companies may use promotions to maintain relationships with customers in advance of a new version or replacement product launch in the near future. Similar to the growth stage, though, sales promotions aren't as necessary in this stage.

Decline

1. In the decline stage, product sales have begun to fall off, because most customers that wanted the product have it. As with introduction, this is a common stage were companies use promotions. The motive is different, though. Companies normally want to clear out remaining inventory of products and generate whatever revenue and cash they can. A new product launch is likely pending, and the business wants to make room in the market for the next generation.

Just as human beings have a definitive life cycle that starts at birth and ends at death, the products they consume also have a life cycle. For products, the life cycle consists of introduction, growth, maturity and decline. Product life cycle characteristics inform the objectives and strategies used by a manufacturer's marketing teams.

In other words, the marketing plan for a product often depends upon what stage of the life cycle the product has entered. New products require brand awareness campaigns, for example, while declining products might be advertised at clearance sales.

Creating a Market

When a company introduces a new product to the marketplace, its primary objective is to create a market for it. To succeed at stage one, a product must meet customer needs and carve out a niche in a competitive market, according to TWI. During its preliminary market research, the company identifies what it believes will be the suitable market for the product and uses strategies such as advertising, social media influencers and special pricing to reach the desired target market. The company also attempts to build brand awareness and show how the product differs from those offered by competitors in the same category.

Increasing Market Share

After the successful introduction of a product, the company then tries to increase its market share, which is its percentage of sales volume compared to competitors in the same category. The company focuses on additional promotional and distribution efforts to reach as many potential end users as possible. During this growth phase, pricing typically remains stable unless the competition is able to deter the product's growth by implementing marketing techniques of its own. If this occurs, the company may be forced to lower the price.

Maximizing Profitability

As demand levels off and the product matures, the company attempts to maximize its profits. Less money may be spent on advertising and promotion as brand awareness is firmly entrenched and the product is well-established in the marketplace. Instead of increasing market share, a primary objective at this point in the life cycle is to maintain current market share. Promotional efforts are geared toward building brand loyalty with existing users, although some attempt is made to entice users of competitors' products to switch.

Prolonging Life

As product sales begin to decline, the company attempts to reap profits for as long as possible while making a decision regarding its fate. According to The Street, all products are eventually phased out or totally redesigned to stay relevant. The company may attempt to revive the product by creating new uses or lowering prices in an effort to maintain market share for as long as possible. If the product has become obsolete or the company has developed a replacement product, it may discontinue manufacturing it altogether and liquidate existing inventory.

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