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.