Marketing Essentials
n Chapter 30 Product Planning
Section 30.2 Sustaining
Product Sales
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SECTION 30.2
Sustaining Product Sales
What You'll Learn
 The product life cycle
 The concept of product positioning
 The purpose of category management
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SECTION 30.2
Sustaining Product Sales
Why It's Important
After products are introduced in the
marketplace, they go through different stages
of growth and decline. It is important to
understand the different marketing strategies
used to sustain product sales over time.
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SECTION 30.2
Sustaining Product Sales
Key Terms
 product life cycle
 product positioning
 category management
 planogram
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SECTION 30.2
Sustaining Product Sales
Product Planning
A product life cycle represents the stages that
a product goes through during its life. There are
four stages of the life cycle:
 introduction
 growth
 maturity
 decline
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SECTION 30.2
Sustaining Product Sales
The Product Life Cycle
The life cycle of a product
can be divided into four
stages: introduction,
growth, maturity, and
decline. Why are sales not
at their highest during the
introduction stage? At
what stage do you think a
product would be most
profitable?
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SECTION 30.2
Sustaining Product Sales
Managing During the Introduction Stage
When the product is introduced to the market,
the focus of the company's efforts is on promotion
and production. During this stage:
 Special promotions may get customers
to try the new product.
 Profits at their lowest because costs of
introducing a product are high. Therefore,
this is usually the least profitable stage of
the life cycle.
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SECTION 30.2
Sustaining Product Sales
Managing During the Growth Stage
During the growth phase of the product life cycle,
the product is enjoying success as shown by
increasing sales and profits. During this stage:
 Advertising may now focus on consumer
satisfaction.
 Competitors may offer new competing
products.
 The company may introduce new models or
modify the existing product.
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SECTION 30.2
Sustaining Product Sales
Managing During the Maturity Stage
A product reaches the maturity stage when its
sales level off or slow down. During this stage:
 The product may have more competition, or
most of the target market may already own it.
 Advertising expenses climb as the company
fights off competition.
 The company decides whether it can improve
the product to gain sales.
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SECTION 30.2
Sustaining Product Sales
Managing During the Decline Stage
During the decline stage, sales fall. Profits may
reach a point where they are smaller than costs.
The company’s options include:
 dropping the product
 selling or licensing the product
 recommitting to the product line
 discounting the product
 regionalizing the product
 modernizing or altering the product
Slide 1 of 3
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SECTION 30.2
Sustaining Product Sales
Managing During the Decline Stage
Sell or License the Product Companies sell
or license their poorly performing products to
risk-taking companies that try to rejuvenate
products.
Recommit to the Product Line Decide that
a declining product can be marketed for other
uses to help improve sales.
Slide 2 of 3
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SECTION 30.2
Sustaining Product Sales
Managing During the Decline Stage
Discount the Product Discount the product to
compete with cheaper store or private brands.
Regionalize the Product Sell declining products
only in the geographic areas where there is strong
customer loyalty.
Modernize or Alter the Product Redesign,
repackage, or reformulate the product to avoid
deleting it.
Slide 3 of 3
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SECTION 30.2
Sustaining Product Sales
Product Positioning
The focus of product positioning is the image a
product projects. The goal of product positioning is
to set the product apart from the competition.
Products can be positioned:
 by price and quality
 by features and benefits
 in relation to the competition
 in relation to other products in a line
Slide 1 of 3
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SECTION 30.2
Sustaining Product Sales
Product Positioning
Positioning by Price and Quality Stresses
high price as a symbol of quality or low price
as an indication of value.
Positioning by Features and Benefits
Stresses product features and benefits,
or unique characteristics.
Slide 2 of 3
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SECTION 30.2
Sustaining Product Sales
Product Positioning
Positioning in Relation to the Competition
Stresses comparison to the competition.
Positioning in Relation to Other Products
in a Line Stresses association with a
successful brand.
Slide 3 of 3
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SECTION 30.2
Sustaining Product Sales
Category Management
Category management is a process that
involves managing product categories—groups
of products that have the same target market
and distribution channels—as individual
business units. The manufacturer can
customize the category's product mix,
merchandising, and promotions according to
customer preference on a store-by-store basis.
Slide 1 of 2
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SECTION 30.2
Sustaining Product Sales
Category Management
Planograms are computer-developed
diagrams that show retailers how and where
products within a category should be displayed
on a shelf at individual stores. Each store then
can stock more of the products that appeal to
people in its trading area.
Slide 2 of 2
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30.2 ASSESSMENT
Reviewing Key Terms and Concepts
1. What is a product life cycle? Name the four stages in
the product life cycle.
2. Explain the concept of product positioning. Why is it
important?
3. List and describe four strategies used to position
products in the marketplace.
4. What is category management?
5. How can manufacturers use category management
to assist a retailer?
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30.2 ASSESSMENT
Thinking Critically
Identify a possible product modification
or product extension for an electric
shaver, a toothbrush, and animal
crackers.
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Marketing Essentials
End of Section 30.2
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