Product Life Cycle

It is claimed that every product has a life cycle. It is launched; it grows, and at some point, may die. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.
The different stages in a product life cycle are:

Introduction Stage
In the introduction stage, the firm seeks to build product awareness and develop a market for the product. At this stage:
1. costs are high
2. slow sales volumes to start
3. little or no
4. demand has to be created
5. customers have to be prompted to try the product
6. profit is not earned at this stage

The impact on the marketing mix is as follows:
• Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained.
• Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
• Distribution is selective until consumers show acceptance of the product.
• Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.

Growth Stage
Next, consumer interest will bring about the Growth stage, distinguished by increasing sales and the emergence of competitors. The Growth stage is also characterized by sustaining marketing activities on the vendor's side, with customers engaged in repeat purchase behavior patterns.
At this stage:
1. costs are reduced due to economies of scale
2. sales volume increases significantly
3. profitability begins to rise
4. public awareness increases
5. competition begins to increase with a few new players in establishing market
6. increased competition leads to price decreases

At this point in time, mostly loyal customers purchase the product.
In this stage, the firm seeks to build brand preference and increase market share.
• Product quality is maintained and additional features and support services may be added.
• Pricing is maintained as the firm enjoys increasing demand with little competition.
• Distribution channels are added as demand increases and customers accept the product.
• Promotion is aimed at a broader audience.

Maturity Stage
Arrival of the product's Maturity stage is evident when competitors begin to leave the market, sales velocity is dramatically reduced, and sales volume reaches a steady state.
At this stage:
1. costs are lowered as a result of production volumes increasing and experience curve effects
2. sales volume peaks and market saturation is reached
3. increase in competitors entering the market
4. prices tend to drop due to the proliferation of competing products
5. brand differentiation and feature diversification is emphasized to maintain or increase market share

At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
• Product features may be enhanced to differentiate the product from that of competitors.
• Pricing may be lower because of the new competition.
• Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.
• Promotion emphasizes product differentiation.

Decline Stage Continuous decline in sales signals entry into the Decline stage. The lingering effects of competition, unfavorable economic conditions, new fashion trends, etc, often explain the decline in sales.
During this stafe:
1. costs become counter-optimal
2. sales volume decline or stabilize
3. prices, profitability diminish
4. profit becomes more a challenge of production/distribution efficiency than increased sales

As sales decline, the firm has several options:
• Maintain the product, possibly rejuvenating it by adding new features and finding new uses.
• Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.
• Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.

A product life cycle is to assert four things: 1) that products have a limited life, 2) product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, 3) profits rise and fall at different stages of product life cycle, and 4) products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Questionnaire

Marketing researchers have a choice of three main research instruments in collating primary data; questionnaires, qualitative measures and mechanical devices.

In this article let us discuss about the Questionnaire.

A questionnaire consists of a set of questions presented to respondent. Because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data. Questionnaire needs to be carefully developed, tested, and debugged before they are administered on a large scale. In preparing a questionnaire, the researcher carefully chooses the question and their form, wording and sequence. The form of the question can influence the response. Marketing researchers distinguish between closed-end and open-end questions. Closed-end question specify all the possible answers and provide answers that are easier to interpret and tabulate. Open-end question allow respondents to answer in their own words and often and reveal more about the thoughts of the audience. They are especially useful in exploratory research, where the researcher tries to get an insight into how people are think rather than measuring how many people think in a certain way.

Dos And Donts of Questionnaire

1. Ensure that questions are not biased. Do not lead the respondent into an answer. Let the respondent decide upon his own answer without being prompted.
2. Make the questionnaire as simple as possible. Do not make the questions confusing by including multiple ideas or two questions in one.
3. Make the questions specific. It is good to be specific with time periods while putting forth the questions to the respondents
4. Avoid jargons. Avoid trade jargons, acronyms and initials which are not a part of daily language.
5. Steer clear of sophisticated or uncommon words. Only use words in common speech. The purpose of the questions is to know the thoughts of the questions and not confusing them using uncommon words.
6. Avoid ambiguous words. Words such as “usually” or “seldom” etc have no specific meaning. They can be treated by individual respondents in different way and thus can lead to wrong conclusions. As stated earlier, questions should be specific.
7. Avoid negative questions. It is better to ask “ Do you ever…..” than “ Don’t you ever….”.
8. Avoid hypothetical questions. It is difficult to answer questions about imaginary situations. These answers cannot always trusted. It is advisable never to ask questions related to products or services of each the respondents have no clue. So, it is very necessary to do a detailed study of the target audience before approaching the audience with the questionnaire.
9. Avoid using words that can be misheard or have multiple meanings. This is specifically important for telephonic interview.
10. Desensitize questions by using response bands. For questions that ask people about their age or yearly turnover, it is best to offer a range of response bands.
11. Ensure that fix response do not overlap. Categories used in fixed response questions should be sequential and not overlapping.
12. Allow the option of “other” in fixed response questions. Closed end questions should always allow for response other than those listed.

Types Of Questions

Closed-end Questions

a. Dichotomous: A question with only two possible answers.

b. Multiple choices: A question with three or more answers.

c. Likert scale: A question with which the respondent shows the amount of agreement or disagreement.

d. Semantic differential: A scale connecting two bipolar words. The respondent selects the point that represents his or her opinion.

e. Importance scale: A scale that rates the importance of some attributes.

f. Rating scale: A scale that rates some attributes from “poor” to “excellent”.

g. Intention-to-buy scale: A scale that describes the respondent’s intention to buy.

Open-end Questions

a. Completely unstructured: A question that respondents can answer in an almost unlimited number of ways.

b. Word association: Words are presented, one at a time, and respondents mention the first word that comes to mind.

c. Sentence Completion: an incomplete story is presented, and respondents are asked to complete it.

d. Picture: A picture of two characters is presented, with one making a statement. Respondents are asked to identify with the other and fill in empty balloon.

e. Thematic appreciation test: A picture is presented and respondents are asked to make up a story about what they think is happening or may happen in the picture.

Direct Marketing

According to Ad Age, "In 2005, U.S. agencies generated more revenue from marketing services (which include direct marketing) than from traditional advertising and media.”

What is Direct marketing?

Direct marketing is a sub-discipline and type of marketing. It attempts to send its messages directly to consumers, without the use of media. This involves commercial communication like direct mail, e-mail, telemarketing, with consumers or businesses, usually unsolicited. It aims at encouraging direct positive response from the customers.

If any advertisement encourages the prospective customers to take a specific action like making calls to toll free numbers or visit a website or reply via sms, then the effort is considered to be direct response advertising.

History of Direct Marketing

The term direct marketing is believed to have been coined in 1961 in a speech by Lester Wunderman, who pioneered direct marketing techniques with brands such as American Express and Columbia Records. But, direct marketing via mail, came into practice in US only in the year 1928, upon invention of typewriter.

Techniques of Direct Marketing

Media Channels

Though direct marketing refers to marketing without any media interference, some direct marketers also media that reaches the audience directly. Door hangers, package inserts, magazines, newspapers, radio, television, email, internet banner ads, digital campaigns, pay-per-click ads, billboards, transit ads are some of the medium used by direct marketers.

Direct Mail

The most common form of direct marketing is direct mail. Advertisers send paper mail to all postal customers in an area or to all customers on a list. The term direct mail is used in the direct marketing industry to refer to communication deliveries by the Post Office, which may also be referred to as "junk mail" or "admail" or "crap mail" and may involve bulk mail.

Bulk mailings are more popular method of promotion for the financial services, home computer businesses, and travel and tourism industries.

Telemarketing

The second most common form of direct marketing is telemarketing, in which marketers contact consumers/prospective customers by phone. But, sometimes this system of telemarketing gives a negative impact on the customers. This mostly happens due to the cold call telemarketing practiced by many of the marketers.

Email Marketing

Email Marketing may have passed telemarketing in frequency at this point, and is the third most widely used direct marketing.

There are many ways to utilize email marketing. It can be broken down into two distinct categories... Targeted and Untargeted email. For better results without risks, it’s always advisable to use targeted emailing than untargeted. The former would even bring in better results for you.

Door to Door Leaflet Marketing

Leaflet Distribution services are used extensively by the fast food industries, and many other businesses focusing on a local catchment. This method is targeted purely by area, and is vey economical.

Voicemail Marketing

A fifth type of direct marketing has emerged out of the market prevalence of personal voice mailboxes, and business voicemail systems. Unlike the email marketing and direct mailing, voicemail marketing presents a cost effective means by which the audience can be reached with the warmth of a human voice.

Couponing

Individual pieces of printed advertising, affixed along with dailies or journals and mostly used for providing a discount or special offers. These are mostly used by businesses, especially those with special promotions during most of the part ofthe year. Coupons can be used for various purposes and can be distributed in a lot of different ways: You can make them part of your regular newspaper ads, stuff them into customer's bags to give them an incentive to return, put them on your website for people to print out and redeem, insert them into publications, or mail them.

Direct Response Television Marketing

Direct marketing on TV (commonly referred to as DRTV) has two basic forms: long form (usually half-hour or hour-long segments that explain a product in detail and are commonly referred to as infomercials) and short form which refers to typical 0:30 second or 0:60 second commercials that ask viewers for an immediate response (typically to call a phone number on screen or go to a website).

TV-response marketing—i.e. infomercials—can be considered a form of direct marketing, since responses are in the form of calls to telephone numbers given on-air. This both allows marketers to reasonably conclude that the calls are due to a particular campaign, and allows the marketers to obtain customers' phone numbers as targets for telemarketing.

Direct selling

Direct selling is the sale of products by face-to-face contact with the customer, either by having salespeople approach potential customers in person, or through multi-level-marketing.

For many marketers, a comprehensive direct marketing campaign employs a mix of channels. Depending on the need, the objective and the target group of audience, marketers decide upon the direct marketing tools to be employed. It is also not unusual for an advertiser, to combine all the direct marketing tools for a large campaign direct mail, telemarketing, radio and broadcast TV, as well as online channels such as email, search marketing, social networking and video.

In a report conducted by the Direct Marketing Association, it was found that 57% of the campaigns studied were employing integrated strategies. Of those, almost half (47%) launched with a direct mail campaign, typically followed by e-mail and then telemarketing.

Return on Advertisement Investment

Advertising is a paid form of communication through a non-personal medium by an identified sponsor. It is based on the AIDA (Attention, Interest, Desire, and Action) model that deals with attracting the attention, arousing interest, creating desire and finally securing action on the part of consumers.

A lot of money is invested in producing a good advertisement. In spite of that, at times, employing good advertising tools, results are sometimes not up to the mark. In order to avoid such situations, advertisers need to keep the following points in mind:

Power of Advertisement: 

Advertising is often considered to be one of the most powerful tools to influence audiences’ choices and preferences. Customers tend to identify the products through the ad itself. A good ad can enhance the image of the advertiser & the increase the sale of the products. Otherwise, it can have a negative impact on the sale of the products, as well as the advertising agency that designed the ad.

A Mix of Features & Benefits:

Your advertisement needs to have a blend of both product features & benefits.  While features are valuable and can certainly enhance your product, benefits are what motivate people to buy. Keep in mind its benefits, not features that appeal to people's emotions. Safety, good health, financial security, the desire for love, status, success, saving  time, and appearing attractive to others these are all examples of needs all people have. To help you do determine your most important benefit, answer the following questions:

      ·         Competitive Benefit: What can my product or service do that my competition's can't?

      ·         Unique Consumer Proposal: What do my customers get from me that they can't get from                    the competition?

An ad copy should be long enough to cover at least the unique selling proposition of the product & crisp enough to be interesting.

Visuals:

To add life to your advertisement, add visuals to it. There are simple yet effective options you can choose for your advertisement's visual component:

·         A photograph of the product in use or the benefit of using it. For example, an advertisement for soap would have a visual of a person with glowing skin.

·         The end result of the product. If you're selling a washing machine, show a picture of piles of clean laundry with dollar bills on top.

·         Before and after using the product. For your shampoo product, you would show an illustration of someone with unattractive, tangled hair, then a photograph of the same person with shiny beautiful hair.

·         Use a diagram explaining the benefits & usage of the product. For example, a printing machine can be shown with diagrams pointing out the switches for various purposes.

·         Show a humorous cartoon or illustration. This works well for getting people's attention.

Right Mode of Communication: 

There are various modes of communication & at times it might turn out to be confusing. So, it’s very necessary to make a proper selection of the medium.  This choice requires a detailed study of the target audience & the product/service concerned.

Feedback:

A communication process is complete only when the feedback to the message is received. In order to enhance the response to your advertising you need to modify certain aspects of your advertisement copy such as the words, colours and the size of the ad. Besides these, you can:

·         Market Effectively: Marketing is one of the most significant aspects of advertising that depends on identifying the right target market. It can be achieved by determining the needs and demands of a particular target group.

·         Time Slot: The time slot often changes the fate of an advertisement, as well as the sale of the product. For example, if you telecast an ad related to children late at night, then you will never get a favourable response. Instead if you advertise in the evening or during the day, you are likely to get the desired response.

·         Add an Interesting Headline: More often than not, people tend to scan through headlines and do not read the entire advertisement. Therefore, it is important to add an interesting headline that can summarize the complete advertisement and get the message across effectively.

·         Determine the Right Price: It is important to set the right price for your products. If you quote high rates, people will not buy them and if you quote a low price, the products will be discarded as low quality. Therefore, it is important to determine a suitable price for the advertised goods, services or ideas.

Advertisements – Empower Your Brand

“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” Jeff Bezos 

The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.”

A brand is an experience or an association with a product, service or entity. It speaks of the performance promised by the product of a company.

A new product in the market is like a new entity in the family. People view it with suspicion & inquisitiveness. With time, the product gets into our life & become a part & parcel of us. Slowly, we tend to forget that it’s just a product & become emotionally bonded to it. This is the point when a brand takes birth!! Brand signifies the identity of the product in the minds of its consumers.

The market is cluttered with diverse products & services offered by various companies. In such a situation, it is tough for an individual to keep a track of all the products. So, it’s very necessary to market your product/service at the right place, at the right time & to the right person. How will people buy products and services if they are not aware of their existence? This is where advertising agency takes on its role of promoting products and services. Their aim is to represent your products and services before customers in such a way that a positive image is created in their minds.

Creating brand image means building a perception of your product’s personality in the consumers’ mind. It is the promise of service; of delivery; of togetherness. No product or company becomes a brand from the very first day of its launch. Like any other relationship, it also requires time & is built on the basis of trust.

Brand image can be reinforced by brand communications such as packaging, advertising, promotion, customer service, word-of-mouth and other aspects of the brand experience.

An advertising agency does the job of introducing your products & services to the customers. It creates eye-grabbing and attractive ad campaigns to persuade customers to buy your products. This necessitates a thorough study of the product & the market. It is also requisite to invest time & money in researching, defining, and building your brand. After all, your brand is the source of assurance to your consumer. It’s the foundation of your marketing communication & you can not do without it! Developing a strategy for your brand is one of the most important & tough job in the hands of an advertising agency.

A strong brand halo makes consumers more likely to trust a company's claims and try its products. Your brand resides within the hearts and minds of your customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot.

The future of your product is in your hand… you can either make it or break it!!