Products have a finite life cycle consisting of four stages: introduction, growth, maturity, and decline. The marketing objectives for each stage differ.
In the introductory stage the need is to establish primary demand, whereas the growth stage requires selective demand strategies. In the maturity stage the need is to maintain market share; the decline stage requires a deletion or harvesting strategy.
There are various shapes to the product life cycle. High-learning products have a long introductory period, and low-learning products rapidly enter the growth stage. There are also different curves for fashions and fads.
In managing a product's life cycle, changes can be made in the product itself or in the target market. Product modification approaches include changes in quality, performance, or appearance. Market modification approaches involve increasing a product's use among existing customers, creating new use situations, or finding new users.
Product repositioning can come about by reacting to a competitor's position, reaching a new market, taking advantage of a rising trend, or changing the value offered in a product.
Branding enables a firm to distinguish its product in the marketplace from those of its competitors. Successful and established brands take on a brand personality, a set of human characteristics associated with a brand name. A good brand name should suggest the product benefits, be memorable, fit the company or product image, be free of legal restrictions, and be simple and emotional. A good brand name is of such importance that is has led to a concept of brand equity, the added value a given brand name gives to a product beyond the functional benefits provided.
Manufacturers can follow one of three branding strategies: a manufacturer's brand, a reseller brand, or a mixed brand approach. With a manufacturer's branding approach, the company can use the same brand name for all products in the line (multiproduct, or family, branding) or can give products different brands (multibranding).
A reseller, or private, brand is used when a firm manufactures a product but sells it under the brand name of a wholesaler or retailer.
Packaging and labeling provide communication, functional, and perceptual benefits.
The four P's framework also applies to services with some adaptations. Because services cannot be patented, unique offerings are difficult to protect. In addition, because services are intangible, brands and logos (which can be protected) are particularly important. The inseparability of production and consumption of services means that capacity management is important to services. The intangible nature of services makes price an important indication of service quality. Distribution has become an important marketing tool for services, and electronic distribution allows some services to provide global coverage. In recent years, service organizations have increased their promotional activities.
