1.Identify the characteristics in the various stages of the Product Life Cycle(PLC). 2.Identity the laggards in the PLC

Characteristics of the various stages of the product life cycle(PLC)

Characteristics		Introduction	Growth		Maturity	Decline
Sales		Low sales	Rapid rising sales		Peak sales	Declining sales
Cost		High cost per customer	Average cost per customer		Low cost per customer	Low cost per customer
Profit		Negative	Rising profit		High profit	Declining profits
Customer		Innovators	Early adopter		Middle majority	Laggards
competitors	few		Growing number	Stable/number beginning to decline		Declining number
Risk	high		lower	higher		highest

Introduction stage

The introduction stage starts when the new product is first launched. Introduction takes time, and sales growth is apt to be slow. In this stage, as compared to other stages, profits are negative or low because of the low sales and high distribution and promotion expenses. Much money is needed to attract distributors and build their inventories. Promotion spending is relatively high to inform consumers of the new product and get them to try it. Because the market is not generally ready for product refinements at this stage, the company and its few competitors produce basic versions of
the product. These firms focus their selling on those buyers who are the readiest to buy.
A company, especially the market pioneer, must choose a launch strategy that is consistent with the intended product positioning. It should realize that the initial strategy is just the first step in a grander marketing plan for the product's entire life cycle. If the pioneer chooses its launch strategy
to make a "killing," it will be sacrificing long-run revenue for the sake of short-run gain. As the pioneer moves through later stages of the life cycle, it will have to continuously formulate new pricing, promotion, and other marketing strategies. It has the best chance of building and retaining
market leadership if it plays its cards correctly from the start.

Growth Stage

If the new product satisfies the market, it will enter a growth stage, in which sales will start climbing quickly. The early adopters will continue to buy, and later buyers will start following their lead, especially if they hear favorable word of mouth. Attracted by the opportunities for profit, new
competitors will enter the market. They will introduce new product features, and the market will expand. The increase in competitors leads to an increase in the number of distribution outlets, and sales jump just to build reseller inventories. Prices remain where they are or fall only slightly.
Companies keep their promotion spending at the same or a slightly higher level. Educating the market remains a goal, but now the company must also meet the competition.
Profits increase during the growth stage, as promotion costs are spread over a large volume and as unit manufacturing costs fall. The firm uses several strategies to sustain rapid market growth as long as possible. It improves product quality and adds new product features and models. It enters
new market segments and new distribution channels. It shifts some advertising from building product awareness to building product conviction

and purchase, and it lowers prices at the right time to attract more buyers.
In the growth stage, the firm faces a trade-off between high market share and high current profit. By spending a lot of money on product improvement, promotion, and distribution, the company can capture a dominant position. In doing so, however, it gives up maximum current profit, which it hopes to make up in the next stage.

Maturity Stage

At some point, a product's sales growth will slow down, and the product will enter a maturity stage. This maturity stage normally lasts longer than the previous stages, and it poses strong challenges to marketing management. Most products are in the maturity stage of the life cycle, and
therefore most of marketing management deals with the mature product.
The slowdown in sales growth results in many producers with many products to sell. In turn, this overcapacity leads to greater competition. Competitors begin marking down prices, increasing their advertising and sales promotions, and upping budgets to find better versions of the product. These steps lead to a drop in profit. Some of the weaker competitors start dropping out, and the industry eventually contains only well-established competitors.
Although many products in the mature stage appear to remain unchanged for long periods, most successful ones are actually evolving to meet changing consumer needs. Product managers should do more than simply ride along with or defend their mature products—a good offense is the best
defense. They should consider modifying the market, product, and marketing mix. In modifying the market, the company tries to increase the consumption of the current product. It looks for new users and market segments, as when Johnson & Johnson targeted the adult market
with its baby powder and shampoo. The manager also looks for ways to increase usage among present customers Or the company may want to reposition the brand to appeal to a larger or faster growing segment.

The company might also try modifying the product—changing characteristics such as quality, features, or style to attract new users and to inspire more usage. It might improve the product's quality and performance—its durability, reliability, speed, or taste. Or it might add new features that expand the product's usefulness, safety, or convenience. Finally, the company can improve the product's styling and attractiveness. Thus, car manufacturers restyle their cars to attract buyers who want a new look. The makers of consumer food and household products introduce new flavors, colors, ingredients, or packages to revitalize consumer buying.
Finally, the company can try modifying the marketing mix—improving sales by changing one or more marketing mix elements. It can cut prices to attract new users and competitors' customers. It can launch a better advertising campaign or use aggressive sales promotions—trade deals, some cedis or cents off, premiums, and contests. The company can also move into larger market channels, using mass merchandisers, if these channels are growing. Finally, the company can offer new or improved services to buyers.

Decline Stage

Here Sales decline for many reasons, including technological advances, shifts in consumer tastes, and increased competition. As sales and profits decline, some firms withdraw from the market. Those remaining may prune their product offerings. They may drop smaller market segments and
marginal trade channels, or they may cut the promotion budget and reduce their prices further. Carrying a weak product can be very costly to a firm, and not just in profit terms. There are many hidden costs. A weak product may take up too much of management's time. It often requires
frequent price and inventory adjustments. It requires advertising and sales force attention that might be better used to make "healthy" products more profitable. A product's failing reputation can cause customer concerns about the company and its other products. The biggest cost may well lie in the future. Keeping weak products delays the search for replacements, creates a lopsided product mix, hurts current profits, and weakens the company's foothold on the future.
For these reasons, companies need to pay more attention to their aging products. The firm's first task is to identify those products in the decline stage by regularly reviewing sales, market shares, costs, and profit trends. Then, management must decide whether to maintain, harvest, or drop
each of these declining products. Management may decide to harvest the product, which means reducing various costs (plant and equipment, maintenance, advertising, sales force) and hoping that sales hold up. If successful, harvesting will increase the company's profits in the short
run. Or management may decide to drop the product from the line. It can sell it to another firm or simply liquidate it at salvage value. If the company plans to find a buyer, it will not want to rundown the product through harvesting.
The Product Life Cycle can be extended by two ways either by modifying the target market by finding and adding new users etc or by modifying the product Adding new features, variations, model varieties will change the consumer reaction - create more demand therefore you attract
more users To prevent the product going into decline you modify the product

SOME LAGGARDS IN THE P.L.C

Introduction Stage-, Sales growth is apt to be slow in this stage, as compared to other stages; profits are negative or low because of the low sales and high distribution and promotion expenses

In the Growth Stage, the firm faces a trade-off between high market share and high current profit, Prices remain where they are or fall only slightly.
Companies keep their promotion spending at the same or a slightly higher level. Educating the market remains a goal, but now the company must also meet the competition.
 

Maturity Stage -The slowdown in sales growth results in many producers with many products to sell. In turn, this overcapacity leads to greater competition. Competitors begin marking down prices, increasing their advertising and sales promotions, and upping budgets to find better versions of the product. These steps lead to a drop in profit.

Decline stage -Here Sales decline for many reasons, including technological advances, shifts in consumer tastes, and increased competition. As sales and profits decline, some firms withdraw from the market. Those remaining may prune their product offerings. They may drop smaller market segments and
marginal trade channels, or they may cut the promotion budget and reduce their prices further. Carrying a weak product can be very costly to a firm, and not just in profit terms. There are many hidden costs. A weak product may take up too much of management's time. It often requires
frequent price and inventory adjustments

Find out the types of consumers in the consumer market and the business market

The different types of buyers and consumers are combined within several major categories, the consumer and the business market. Amid these two major categories, the consumer/buyer market is comprised of individuals and households that purchase “goods and services for personal consumption,” whereas the business market encompasses organizational entities that purchase goods and services for the “use in the production of other products and services or for the purpose of reselling or renting them to others at a profit.”

Business markets possess a smaller amount of large buyers, unlike the consumer market, and whose consuming traits are “more geographically concentrated.” Dependent on the type of buyer and consumer, characteristics through decision processes may differ. For instance, the consumer market’s behavior is “influenced by four key sets of buyer characteristics: cultural, social, personal and psychological.” Culture, is defined by social class and group wants and behaviors; social, incorporates the factors of influences by family and small groups that determine ideal brands and products; personal adopts the different age groups and lifestyles, and psychological, utilizes motivators and perception of “beliefs and attitudes.”

Additionally, the business market’s behavior is influenced by a buying center that displays “three types of buying situations: straight rebuys, modified rebuys, and new tasks.”

Types of Consumers

Seasonal consumers

These are types of consumers who purchase and consume products on seasonal basis. You would most of the times not find these types of consumers buying the goods or service in question but rather at certain times when the need for them arises. They buy products that are season based or demanded at certain times and not all the times.

Examples

·         Purchasing umbrellas during the rainy season

·         Purchasing cold drinks during the hot seasons

·         Going out for holyday during the Christmas season

Personal consumers

These types of consumers are individual consumers who purchase goods for the sole purpose of personal, family or household use. The products are primarily used for personal, family or household use to satisfy a certain need or want that the consumer may be having at a particular point in time.

Examples

·         Going to the supermarket and shopping for goods which are to be used in the house

·         Purchasing a car that you intend to use personally

·         Purchasing clothes for personal use from a clothing mall

·         Purchasing a mobile phone to communicate with people

Organizational consumer

Organizational consumers are consumers of goods and services whose main intention is not for immediate use but rather to use it for things like production, using them to carry out the organization’s activities or for resale purposes aimed at getting profits as a result. Unlike the individual consumer organizational/industrial consumer does not purchase products for immediate personal use but rather for other uses. Industrial consumers are companies or organizations who themselves engage in the business of buying, selling and aiming at maximizing profits. They purchase goods and services from suppliers in order to use the same materials to manufacture other products which are then offered for sale to the target consumers. E.g. an organization may buy raw materials that are aimed at producing other goods which will later be offered for sale to other consumers.

Organizational consumer consists of the government agencies, business organization, non governmental organization (NGO), firms and different types of manufacturing companies who purchases the goods and services in order to run the business of the firm or business concern or business organization.

Impulse consumers

Impulse consumers or buyers are those who make unplanned buying decisions. Impulse buyers make swift buying decisions in that they encounter products which they immediately purchase after they fall in love with the product and its features. The products they purchase were not initially in their plans but as a sort of something that comes up all over sudden from somewhere and that calls for the consumer to make an unplanned purchase.

Need based consumers

Need based consumers are those types of consumers who buy goods and services when they need them and not any other time. A need for a certain product will necessitate buying it as the consumer would find it tempting to buy the product because it is needed immediately for a certain purpose.

Discount driven consumers

Discount driven consumers are types of consumers who are purchase goods and services primarily for the discounts on offer. They may not engage in any buying activity for most of the times only to act when they hear or see large discounts being offered on products they like. They are price sensitive and they would rather wait and purchase products when they come with discounts as opposed to when they have no discount.

Habitual consumer

Habitual consumers are those who find it a must or compelling to use certain type of goods whenever they are presented with the opportunity. It is just like a habit that they can’t do without engaging in it. E.g. the cigarette smoker falls under this category of consumers. The person would smoke at any given time when he/she has a cigarette. He may also not be able to do without smoking because it is a habit that he has become addicted to.

Advertising Assignment 1.What are the criteria for selecting an International agency for International Advertising ( 6 points)

Your business has been doing well for some time now,you have every reason to be proud.your sharp advertising and sales force has stretched every limb and sinew to cover your local market your brand/product is now a household name in  your town,and your customers are your best ambassadors.now you dare to dream big,so you must act that way to.

when you think its time to go international,it is still the mass media that can do the trick,and for that to happen there is a need to advertise your product internationally to be able to catch a new market since most domestic market for many products and services are stagnant,also international advertising will offer growth opportunities for your company.

In order to find the right international advertising agency you must make a checklist of some parameters to include in your evaluation,here are some of the criteria you have to look out for before you zero in on "the one".

1.Ability of agency to cover relevant market: this is because competition has become global,and since  marketers are even competing globally so must advertisers.This will determine whether the advertising agency will be able to make your product recognized worldwide.they can even use CNN to advertise your product since CNN is worldwide.

2.Quality of agency work: This will check if they will  be able to give out professionally designed labels.thus let their work speak for itself.every advertising agency will talk about how creative they are ,but sometimes one man's food is another's poison.look at some of their prior work to decide whether their particular brand of ideas is what your product needs.A lot of agencies will brag about the awards they have won,forget them,listen to the one that talks about how their work has helped build their clients products.

3.Market Research,PR and other services offered:Look for an all round capability since choosing an international advertising agency is time consuming.make sure the agency can provide 360˚support service that includes not only advertising in print, TV and internet but also direct marketing and public relations.At the same time enquire about their infrastructure,that is,do they own a design studio or do they outsource;what contracts do the have with printing companies and above all,are they proficient in media buying activities.


4.level of communication and control desired:Talk deliverables.every one loves advertising,its glamorous,exciting,creative and its also expensive so must be able to measure the results of the advert.measuring the return on investment(ROI)on an advertising campaign is well nigh impossible or at best,a difficult task.sales might go up,but that could be due to to any number of reasons.and what that happens once the campaign is over?its not like sales will drop down to pre -campaign levels,so how do you measure the benefits over the long term?there are no clear answers and you'll have to learn to live with this fact.however, while choosing an advertising agency,we should keep our discussions as specific as possible.we should ask whether they can guarantee a certain impact-it need not be rise in sales alone.increased in brand recall and customer enquiries are equally important fallout's of an advert.


5.Role of the company advertising department and agency: here you must look for chemistry,advertising is  first and last,a people driven business.make sure you know who is going to work on your account/product and put it in writing.access to the big boss in the agency is usually restricted once your account is in the bag,but that should make no difference as long as the guys on the ground know what they are doing
 you must also look out for reliability.your advertising agency is going to be privy to a lot of your plans,so you need to ensure they can keep confidential information to themselves,most advertising agencies will tell you that they do not handle competing accounts,but do not let it rest there,check if the agency has a smaller division or another group company that's serving your competitor.finally ,insist on a confidentiality clause that protects your interest in the contract before you sign it.


6.Company organizational structure:size does not matter,big is not necessarily  better and small advertising agencies have proved that time and again,in fact,choosing an advertising agency that's aiming to rub shoulders with the top-notch in the world could work against your business,especially if you want to start small.heavy agencies are likely to put larger clients on priority,at the expense of smaller firms,and sooner or later it will tell in their work.instead,sign on an agency that is interested in the creative challenge that your business/product offers,or one that is keen to work with you for the long term.


submitted by MARILYN OFORI-DAVIS