After a product such as the hi-fi system have been developed and put on the market it is said that it goes through the Introduction Stage. Despite the very low competition since it is a new innovation, sales are low as consumers have to still need to get to know about the product and its benefits over other products such as the radio. Thus a lot of promotion is needed to inform potential customers about the advantages and uses of the new product concept. Consumers need to know the functions of the hi-fi, that it is run by electricity, about the power of the sound, that they can play CD’s or cassettes and that it still conatins a radio and how it will effect their life. In order to bring the product at this stage surely a lot of costs such as research and development would have been incurred, and moreover other expenses have to be done to undergo launch promotion and set up distribution chanels. Thus price can either be high especially with durables as n the case with the hi-fi system, which need a high amount of money on the 4p’s. Also the price can be be very low because of the low demand. Price in the Introduction Stage will be either price skimming or penetration. This suite most for the perishable goods example new range of food stuffs. In this level frequent modification is still undertaken due to certain problems discovered after its launching.
After consumers see that a hi-fi is worthed and suites them the product can now be classified under the Growth Stage where sales start to increase quickly and more distribution channels are establish. In creating a hi-fi system surely required a lot of research and development and tones of money where spent to pay experts on electronics to make this product. In the Introduction Stage it is not possible for the firm to cover these expenses but in the Growth Stage, the breakeven is reached and the firm start earning profits. Thus at this stage competitors will be encouraged by the profits being made and so they enter the market resulting into price reduction. New entries will result in product variety where some will try to improve on the product such as increasing the sound and providing better styles and colours to compliment the room it is put in. Others try to refine their offerings to a better job of appealing to some target markets, for example to attract more consumers of different age group a retailer can make an offer that with each hi-fi system purchase they will give 5 Cd’s free that range from 80’s music for the grown ups, classical and country music for the eldery till today’s modern music for youths. As a consequence of this situation heavy promotion is done on the brand name and since hi-fi system are substitutes retailers have to focus on communicating the quality. Retailers must also take care of the augmented part of the product which includes guarantees on the product that attract customers.
For a product to have better success in its early stages it must own certain characteristics such as the greater the comparative advantage of a new product over those already on the market. In the case of the hi-fi system people will compare the advantage upon the radio. Sales growth is also faster when the product is easy to use since people of a low level of education and the elderly will find it easy to use . Also if the product can be tried with minimum risk and is compatible with the values and experiences of target customers, they are likely to buy more quickly.
Followed by the already mentioned stages is the Maturity Stage, where competition is most intense as companies fight to maintain their market share resulting in a sort of the battle of the brands. Here, both marketing and finance become key activities. Promotion must reinforce the message to attract new buyers. Sicne Hi-fis is a technology system it can be renewed and differentiated by time in order to stay in the market. For example hi-fi’s that can take more than one CD, two compartments for the cassette and the facility to record, adding a remote control, producing different sizes and increasing functions. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors such as differentiation, and price reductions. Thus if industries sets minimum prices to avoid ‘pyrrhic’ price victory .
Although this Decline Stage have not yet been reached regarding Hi-fi’s surely sales have decreased once other products entered the market. Such products are CD players, iPod’s, computers that can play a CD, portable CD and Radios. Hence the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.
The more a firm takes care of the marketing mix without forgetting what the consumers are looking for, thus in a few words remaining competitive, during the product’s existence the longer the product’s life cycle will be.
