Marketing Strategy: Product
Discussion on Marketing Strategy specific to Product;
inclusion of Moon’s Break Free from the Product Life Cycle
MATT CHECCHIO
MKTG 450W
Overview
 Product
 Branding
 Product Life Cycle
 Moon’s three positioning strategies and discussion in
Breaking Free from the Product Life Cycle
Dolan and Total Product Concept
 The total package of benefits obtained by the
customer: total product concept
Dolan: Product Line Planning Decisions
 Product line breadth – broad vs. narrow markets
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Company’s position on desired consistency or similarity between lines it
offers….
Personal computers: desktops, offer laptops?
Apparel: Men’s golf line, offer womens?
Automobile: Sedans, should offer a mini, crossover?
 Product line length
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How many items will there be in a line providing coverage of different price
points?
Beer producer produce a premium segment?
High end computer maker enter the “value/under $999”?
 Product line depth
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How many types of a given product? Number of SKUs…
Golf polo at $110 should be 5 colors or 3?
Product Life Cycle
Introduction
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Risky and quite expensive due to creating customer awareness, encouraging trials
At this stage, the product is new and untested, which implicates that potential customers may be unwilling or
reluctant to purchase it.
Production is typically kept low to avoid major financial losses through production and inventory costs.
Many products fail here. repeat purchases and recommendations are crucial here for sales increases.
Much technology: AI, VR, autonomous vehicles live in this stage for years.
Marketing
Objective
Product Awareness & Trial to selected target audience(s)
Costs
High; production costs, customer acquisition cost
Sales
Low, revenues generally low.
Profits
Per item small / overall in the red due to recovering development and launch costs.
Product
Offer basic product / model
Price
Price skimming or penetration
Distribution/Place
Limited, so build selective outlets. Find willing suppliers willing to stock.
Promotion
Building product awareness among early adopters, innovators (high-income groups) and
dealers. Word-of-mouth, influential bloggers or social media personalities to showcase.
Growth
 Sharp rise in sales (take-off point) with the rising number of competitors coming to market.
 Meeting market needs or stimulating previously untapped needs.
 Competitors have time to assess the product, predict its impact on the market and potentially
respond with a similar or improved version of the offering.
 The Total Product Concept is crucial here to determine before competitors can imitate and undercut.
 Is Netflix growth or maturity? Amazon? Tesla?
Marketing Objective
Maximizing market share, shift from niche to mass
Costs
average cost pricing: set price equal to average cost + certain profit margin
Sales
Rapidly rising
Profits
Rising due to sales revenues rising faster than costs
Product
Offer product extensions, service, warranties = total product concept is crucial to sell
here. Feedback from consumers to offer new/better features
Price
Strategies to penetrate market to expand market and establish market share.
Distribution/Place
Increasing & build intensive distribution.
Promotion
Build awareness and interest in the mass market; highest in this stage. Mass media
advertising establishing brand image.
Maturity
 Survive the competition, customer confidence and satisfaction high, but sales flattening. Tendency
for companies to capture customers from their competitors by undercutting each other on prices and
increasing promotional efforts, thus forcing weaker competitors out of the market (shake-out point).
 The problem at this stage is heavy price competition and resulting increased marketing expenditure
from all competitors in order to retain brand loyalty.
 Opportunity to diversify product line depths and lengths. Ie. Mars’ and Coca-Cola
 Innovating the market (market development), modifying the product (product
development), and altering the marketing mix (marketing innovation) to maintain success
Marketing Objective
Maximize profit while defending market share
Costs
Low cost per customer
Sales
Peak sales, growth slows down entering this stage
Profits
Maximizing, preventing sales declining while maximizing profitability.
Product
Diversify models & lines, expand brand, or product modifications to extend stage life
Price
Wanting to increase; Matching or beating competitors to keep market share
Distribution/Place
Build more intensive distribution
Promotion
Stress brand differences and benefit
Decline
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Customer preferences change to due superior products and consumers’s shift in values, beliefs, tastes, and
wants to products offering more value.
Three strategies for handling the decline stage:
 Harvesting: only little to no marketing support. Maintain life of product as long as possible until new products
launched or alternative means of new income.
 Phased withdrawal: hard cut-off date unlike harvesting. Interim stages of pulling from distribution. Can introduce
replacement products. Car manufacturers are notorious for this.
 Contracting out: Loyal users of a product can be retained when the brand or the rights to produce and sell the product
are handed on to a niche operator or by subcontracting. Buy-outs, mergers. Ie. Converse sneakers
Marketing Objective
Reduce expenses and milk the brand , niche audience opportunity
Costs
Lowest cost per customer
Sales
Declining
Profits
Declining
Product
Phase out weak items and replace with the next model/upgrade
Price
Cut, bundle
Distribution/Place
Selective: phase out unprofitable channels and outlets
Promotion
Reduction; only to a level to retain hard-core loyal customers
Furthermore…
• Stable products – Some products have defied time to maintain the period of maturity for a considerable
time.
• For example, products like Kelloggs Corn Flakes, many commodities and food, seem fairly stable and immune to
technological innovation.
• Maturity from the start. Some products are launched to great fanfare and product awareness.
• For example, the iPhone X is related to previous iPhones so there is no need for an introduction phase. Rather than using
penetration pricing, this products can practice price-skimming – where the firm takes advantage of inelastic demand.
• Failed products. Many products never really escape the introduction phase. Many failed launches are related
to technology.
• Reinvented products. Some products have successfully reinvented themselves and proved to be more
successful after a period of decline.
• For example, in the mid 1990s, Apple computers appeared to be in its decline phase, but in the late 90s and early 2000s, it
successfully re-pioneered itself. You could say that the Apple MacBook is a different product to previous Apple computers. It
depends how you define a product.
Moon’s Breaking Free from
the Product Life Cycle
Three positioning strategies within the PLC
How to Break Free from the PLC?
 Repositioning the product in unexpected ways. But
normal the easy and lazy way is:
 Many times product managers solutions are to “provide an
endless parade of new features.”
 New technologies or advancements to change product
 Undercut by pricing
 1. One or two carefully selected attributes
 2. Think of recategorizing the product
 3. Covertly conceal the true nature
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Reverse Positioning
Shed the product attributes the rest of the industry find sacred and only focus on the
stripped-down product with one or two more carefully selected attributes.
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Move backwards from Maturity stage to Growth stage establishing unique position in category
Stripped-down
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No in-store sales assistance
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Variety is limited
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No delivery option and take away old furniture
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Requires assembly
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Durability not to be expected, replaced often
Added
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Airy, ultramodern look to stores
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Day care center
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Lunch at a café
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Other items like brightly colored housewares and cleverly designed toys
Developed a new segment and “eclectic mix of customers – from students to young urban
professionals who previously spread their furniture shopping around.”
Stripped-down
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Checking and savings account offers
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The traditional “bank feel”
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Lowest rates in the market for savings
Added and repositioned as “America’s Most Convenient Bank”
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Just four checking account types
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Major expansion
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Opened seven days a week and evenings
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Debit card while you wait
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Customer service, such as when it rains walk you to your car in an umbrella
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Free coffee and newspapers
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Free coin counting penny-arcade machines
Repositioning offered unprecedented bank perks that a segment cared about and didn’t
care about the endless bank product options and claims to offer “best rates.” Convenience,
give me my money when I want it, and deposit my check after hours. Before ATMs did this.
Reverse Positioning
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Shed the product attributes the rest of the industry find sacred and only focus on the
stripped-down product with one or two more carefully selected attributes.
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Move backwards from Maturity stage to Growth stage
Stripped-down
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Following Southwest’s lead offering cheaper seats and a lean USP: no meals,
no round-trip fares (at the time), and no-first class seating.
Added
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Leather seats
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High-end personal entertainment systems with satellite TV
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Extra legroom seats in the back X rows of the plane
Unique position setting itself a part from the low and high end while offering features of
each appealing to a broad number of segments from college students to business
executives.
Breakaway Positioning
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A product escapes their category and deliberately associating with another one
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Move from Maturity stage to Growth stage again by framing a product into a new category
Swiss watches positioned as a form of jewelry
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Serious, enduring, expensive and discretely promoted
Playful fashion accessory
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Fun, ephemeral, inexpensive and showily promoted
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Spawned impulse buying – customers buying ½ dozen designs
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$40US when introduced reaching beyond the default category of jewelry into
a broader market of fashion accessory with different customers and
competitors
Became best-selling wristwatch of all time and created a subcategory in fashion accessory.
Timex, Citizen, Calvin Klein and Coach all followed suit. Fossil launched a year later exploiting
this new market space.
Cartoons typically for children and
prime-time space for adult sitcoms.
Meshed the two on Fox that was a
new network willing to take chances
to get eyeballs and build an
audience.
Type of programming allowed it to
breakaway from typical prime-time
being a cartoon with the satire and
subversive social commentary
included.
Packaging into flamboyant bottles
with kid friendly nozzles with unketchup hues like green, purple and
orange. More than a food – it was
arts and crafts for kids. Competitors
and other food products copied with
colors, but missed the boat.
Repositioned breaking away from
food and affiliating itself with the
arts and crafts category.
Stealth Positioning
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Conceal the true nature of their products by affiliating them in a different category
• “Cell phone” category dominated with cheap flip
phones that can call and text.
• PDA devices expensive, bulky and cumbersome to
use.
• Personal computer use between desktop and laptops,
which are still relatively bulky and expensive
• Imagery and photos still on cameras and digital
cameras
• The i-Phone creates the smartphone category and
combines the best of all. Facebook does not explode
in usage, all social media, without the iPhone.
Similarly to the story of EyeToy Play
in the article, Wii was a video game
system by Nintendo but with
controllers that were more userfriendly and took no video gaming
experience what-so-ever to play.
Many games were made simple –
bowling, golf, table tennis, dancing,
Wii Fit, racing and other Nintendo
classics.