At the introduction stage a product makes its first appearance in the marketplace (Miller, 2001). Customers need to be aware of its arrival hence the main marketing activity is promotions. Promotions will be the primary objective for marketers of both convenience and specialty goods.
For convenience products, promotions will attempt to be widespread, television, radio etc. For specialty products, brand status and exclusivity must be maintained. Therefore advertising will focus on invitation only events, celebrity functions etc.
Pricing for both products will be markedly different. Prices for convenience goods will be set low, in an attempt to penetrate and capture market-share (Impact Consulting Group). Convenience goods suffer from brand substitutions, therefore consumers will use prices as the deciding factor in the purchase decision. In contrast, specialty goods will be priced very high. This is due to the generally high costs of R&D, forcing companies to try and recoup much of the development cost early in PLC (Impact Consulting Group). This is also to ensure exclusivity of the product.
Establishing sufficient distribution channels is vital in the introductory phase. Place and time utility is paramount in any purchasing decision. Firms supplying convenience goods will construct a widespread distribution network. Convenience goods are considered to be very homogeneous, therefore companies must ensure their products are readily available, when and where the consumer wants them. Specialty items do not suffer from brand comparison, they are considered to be very heterogeneous. Distribution for specialty goods will be limited.
The key marketing mix for specialty goods during introduction is product. The product must be associated with sophistication, exclusive brand and feature distinct desirable qualities. The complete product package, including a high quality item, excellent service, pre-sales and after-sales support needs to be implemented to guarantee full consumers’ satisfaction. The reverse exists for convenience goods, where brand substitution is paramount. The product needs only to meet a minimum level of quality with little support.
The next phase of the PLC is the growth stage. During the growth stage, market acceptance of the product increases, which leads to increases in sales. Competitors may react to the success of the product by launching a rival (Kotler et al, 2001). For convenience goods, advertising continues to be a vital part in the marketing mix. However promotions become less important for specialty goods. Advertising and sales personnel do not attract consumers to specialty goods. It is the product itself that attracts consumers. Thus product decisions are important when marketing for specialty goods. Upgrading or rectifying faults with the product, offering increased service support will all help to sway consumer buying power. Price decisions for both convenience and specialty goods will remain fairly constant at this stage. Prices may drop slightly due to increase competition.
The growth phase signals increases in sales and revenue. Firms will look to expand distribution as a result. A company offering convenience products will try and increase its distribution strategy, attempting to sell its products through a more intensive range of outlets. However, distribution for specialty products will remain limited. This will continue throughout its PLC.
The third stage of the PLC is maturity. At this stage, product sales slow, with sales volumes remaining constant (Kotler, 2001). Competition is very high at this stage. Prices for convenience goods may be reduced in an attempt to maintain market share. This tactic may attract new consumers or sway competitors’ consumers (Kotler, 2001). Prices may reduce marginally for specialty goods as well. These price reduction differences are a result of less competition within the specialty market. During this phase companies of both convenience and specialty goods may decide to enter new markets in an attempt to increase sales. Promotion activities for convenience goods are increased significantly from the previous stage (Kotler, 2001). Aggressive sales promotion including discounts and bonus could be implemented. However for specialty goods, promotions will remain at a minimum, since brand awareness and exclusivity should already be present in the marketplace through earlier promotional activities. Companies may attempt to modify products to reignite demand. Since convenience goods are not brand focused, companies are able to introduce varieties of the product with different brands and slightly different features. Better packaging and services will also help the company to achieve its objectives. Similarly for specialty goods, an improvement to the product is required together with better support and services. Generally the company tends to spend heavily on its R&D to find better solutions of the existing products or new products (Kotler, 2001).
The decline stage signals the final stage of any product. At this stage, sales are declining and may plunge to zero (Kotler, 2001). The rate of decline is product dependent. Companies may stop production of existing products, and focus on other products that are in an earlier phase of their PLC. Promotion activities cease to exist for both convenience goods and specialty goods. Usually the price for convenience goods at this stage tends to increase. The availability of the product will also be reduced at the same time. Very few specialty goods exist at this stage. Most companies will spend their money and focus on producing new products or finding solutions to upgrade the existing product.
In concluding, it is crucial to recognise that marketing mix variables change depending on the stage of the PLC and the different product categories. These changes are vital in order to adjust to the evolving challenges and opportunities.
Bibliography
Hoffman, K.D. et al (2004) Marketing Principles & Best Practices. 2nd edition. Fort Worth, Dryden.
Kotler, Phillip et al. (2001) Marketing. 5th edition. NSW, Prentice Hall.
Miller, O. (2001) The product life cycle & the marketing mix. Credit Management Stamford, 36-7.
Impact Consulting Group (No Date) Introduction to marketing. [online]. Available from http://www.rotman.utoronto.ca/impact/marketing.htm [Accessed 20th August 2004].
The Chartered Institute of Marketing (2001) 10 minute marketing mix. [online]. Available from http:// [Accessed 20th August 2004].
Paladino, Dr. A, (Semester 2, 2004), Principles of Marketing Lecture Notes, University of Melbourne
