Agricultural Advertising & Marketing
Kristi Murdock
We’ve Learned:
That MARKETING involves: “creating a product , then
planning and carrying out the pricing, promotion, and
placement of that product to stimulate buying
exchanges in which both seller and buyer profit in
some way.”
We’ve learned:
That people don’t buy the
They buy the
In other words, people buy solutions to problems; they
buy to satisfy needs.
We’ve learned:
That in order for the buyer to benefit from a sale, the
product must successfully meet the buyer’s need.
And we’ve learned a little bit about identifying (and
appealing to) the different needs that people have.
Next on the Agenda:
The LIFE of a product
Important Concept:
The Product Life Cycle
Most products don’t “live” forever!
Stage One: Introduction (the “Launch”)
Stage Two: Growth (assuming launch was successful)
Stage Three: Maturity (we hope this lasts a long time)
Stage Four: Decline (product may lose viability unless
rejuvenated)
Product Life Cycle
Characteristics of the
Introduction Period
Low sales
Customers may not be aware of your product
and its benefits
Higher advertising costs
Negative profit usually
GOAL: establish a market and build demand
Marketing Mix During
Introduction
Product : limited variations
Price : generally high
Promotion
Goal is to build awareness
and convince sellers to
carry product
Provide samples or trial
incentives
Place: Usually selective but
Scattered
Characteristics of the
Growth Period
Rapid revenue growth
Sales increase
Additional market segments come on board
More retailers carry the product – expanded
distribution
Competitors enter market & price competition
begins
GOAL: gain customer preference and increase sales
Marketing Mix During Growth
Product : new product
features, packaging,
quality improvement
Price : May be reduced
to capture more
customers
Promotion: Increased
advertising to build
brand preference
Place: More extensive
Characteristics of the
Maturity Period
Most profitable
Slower pace of growth
Less Advertising
Competitors product may be very similar
GOAL: maintain market share and extend
product life cycle
Marketing Mix During Maturity
Product: Modifications and
features added to differentiate
product
Price : Possible reductions to
compete better
Promotion
Emphasize differentiation
Build brand loyalty
Place: New distribution
channels and incentives to
avoid losing shelf space
Characteristics of the
Decline Period
Sales decreasing
Market is saturated
Product is obsolete
Unit costs may increase with
declining production volume
Marketing Mix During Decline
Product
Number of products in product line
reduced
Try to rejuvenate surviving products
Price
Prices lowered to liquidate
discontinued products
Prices maintained for niche markets
Promotion
Low expenditures
Reinforce brand image for
continued products
Place
Distribution more selective
Phase out channels
Period of Decline:
Considering the Options
Shall we maintain the product?
Can we out-last competitors
How can we reduce costs?
What new uses (needs) can we find for the product?
Shall we “Harvest” the product?
Reduce market support (& associated costs)
“Coast” to see how far it can get.
Shall we discontinue the product?
No more profit can be made . Stop production and support.
Where are these products in their
Life Cycle?
Electric cars
Hybrid cars
Refrigerators
Black & white
television sets
High Definition
television sets
GPS collars for pets
Rabies vaccine
Cotton bed sheets
Haircuts
Oil changes
Genetic testing for
breast cancer therapy
Horseshoeing
Home theater design
Physical therapy for
pets
Telephone operator
services
Mapmaking
A Fad is identified by its Life Cycle
Rapid growth during
introduction
But no sustained
growth or sales
following that
Examples of Fads
Generally, almost anything that is a “Must Have” Christmas present item
is a fad (see http://www.badfads.com/)
Tickle-me Elmo
Cabbage Patch dolls
“Baby on board” signs
Furby
Rubik’s Cube
Coonskin caps (circa 1950!)
Bell-bottom jeans
Pet rock
Go-go boots
Poodle skirts
Any “named” haircut (pixie, mullet, Dorothy Hamill, Farrah Fawcett)
How can you extend a
product’s life?
Market Modification
Increase frequency of use by current customers
Add new customers
Find new uses for the product (example: baking soda)
Product modification (change product’s market mix)
Product – Add “bonus” features, “new & improved”
Price – lower
Promotion – change your advertising
Place – add new distribution channels
Modifying the Product
Upgrade features and benefits
Example: from litterbox to self cleaning litter
box to litterbox over the toilet
Example: from portable phone to “device that
keeps track of my appointments, does math,
works as an alarm clock and memo pad AND
works as a portable phone”
Example: “20% more at the same price!”
Modifying the Price
You can always lower the price, but remember:
The price of your product exerts influence over the whole
operation
Customers’ perception of value
Image of the product
Under-valuing a product can be as destructive as overpricing a low value item
Modifying Promotion
Short term strategies
Give customers incentives to buy
Coupons
Sales
Business card drawings
These produce results quickly without lasting impact
Less common in services but very common in retail
Change the advertising campaign
Marshall Macluhan : “The Medium is the Message”
Modifying the Place
Add some distributors, delete some distributors
Change retail outlets
New displays, different department or shelf location
Can change the whole concept of the product!
Important Word: Commodity
Q: What is a commodity?
A: A product that the customer perceives to be differentiated
only on price.
Examples:
Soybeans, corn, pork bellies, cattle
(The Commodities Market)
Nalgene water bottles
Pet bath & blowout
In general, it’s easier to make money on
products that aren’t commodities!
Assignment
Due Tuesday, Jan 27.
Select a product (hint – this will be more fun if you
pick a product that has been around a while) and
1. Identify the product
2. Identify where the product is in the product life
cycle – and why you think so.
3. Identify changes that you would recommend making
in each of the 4Ps to increase sales of this product.
4. Give an example of current promotion of this
product.
5. Identify the need(s) that the promotion targets.