Select Test Cities (Panama City or Dayton Ohio?)
Does skipping test marketing save money?
Sometimes, line extensions are not tested (Quaker Chewy)
Commercialization takes a substantial amount of $ (New Coke)
Some firms “roll out” their products gradually (movies; Pixar)
Product life cycle (4 stages): for product IDEA, not individual firms.
High marketing costs (inform)
Slow sales increase
Low or no profit (Amazon.com)
Low competition
Price often high (ex. Calculator)
Product life cycle (cont…)
High marketing expense (inform and persuade)
Many small competitors – market entry (athletic apparel)
Little price competition
Industry profits rise/peak and sales increasing
What other products are in growth?
Product Life Cycle (3)
Industry sales level off; profits down
Promotions stop rising: moderate marketing expense (persuade)
Fewer, stronger competitors: tough competition in general
Many consumers view product as homogeneous; price competition
Decrease in industry sales/profits
Low marketing expense; small groups remain loyal
Dropouts: few competitors; most gone