Presented by
Bob Perry

– organizes,
– manages, and
– assumes the risks of a business or enterprise

Product
C
Customers
Price
Place Promo

The needs satisfying agent that is offered.
• Convenience Goods
– Staples
– Impulse
– Emergency
• Shopping Goods
– Homogeneous Goods
– Heterogeneous Goods
– Specialty Goods

• Products (like customers) have a life cycle.
Sometimes these life cycles can be short, but often the life cycle of a product can be longer.
• Generally, a product will go through four stages during its life cycle:
– Introduction/Development (Birth)
– Growth
– Maturity
– Decline (Death)

Development &
Introduction
Growth Maturity Decline

Typical Characteristics
• Sales grow slowly
• Few if any established customers
• Frequent product modification
• Skimming price strategy
• High failure rate
• Profit minimal to negative
• Limited product models
• Little competition
• High Promotional Cost
• Focus is on creating awareness of product
• Promotion strategies need to create demand
• Intensive personal selling to distribution channel comm on

Typical Characteristics
• Sales grow at an increasing rate
• More customers are established
• Profits increase as sales increase with more limited competition
• Prices start falling as competitors are added
• Large companies may acquire smaller, pioneering firms
• Heavier brand advertising and focus on differentiation between brands
• Economies of scale start to influence pricing

Typical Characteristics
• Sales continue to increase as the market place grows with adapters
• Profit margins begin to shrink as more competitors enter market place
• Product lines are widened or extended
• Emphasis on product style more than just function
• Marginal competitors begin to drop out of marketplace
• Heavy promotion to maintain market share
• Maturity stage can last for an extended period of time.

Typical Characteristics
• Sales decline or disappear
• Sometimes new products with more utility replace older products
• Falling demand forces many and eventually most competitors out of the marketplace
• Some specialty firms may stay in the market for a long time as competition leaves the marketplace.
• Sales are generally low and the only way to survive is to find niches for the product that can support higher pricing

• The Adoption Curve is adapted from a Everett
Rogers Diffusion of Innovations and is used to show how quickly differing consumer groups adopt new products
• The Adoption Curve segments include:
– Innovators (3% to 5%)
– Early Adopters (10% to 15%)
– Early Majority (about 34%)
– Late Majority (about 34%)
– Laggards (5% to 16%)

• Do not rely on norms or past standards
• First to adopt any new product, service, or idea.
• Tend to be younger with higher social or economic status
• Rely less on group norms and like to get their information from technical sources and experts.
• Generally 3% to 5% of the population

• Relatively high is social status and often opinion leaders.
• Typically younger, more mobile, and more creative than majority
• Rely on input from innovators and technical sales

• Early Majority consumers collect more information about the product and will weigh the pros and cons before they make a decision.
• They listen to their opinion leaders and will rely on their groups’ opinions instead of forming them for themselves.
• Early Majority group members are positioned between the earlier and later adopters and are deliberate in their data collection process.

• Late Majority consumers adopt a new product mainly because their friends have all adopted them and they feel the need to conform.
• This group is typically older and may have below average income and social status.
• They listen to word-of-mouth communication over mass media, since they trust their friends more.

• Laggards do not rely on group norms and values, just like
Innovators, which makes them difficult to reach.
• Their past heavily influences their current decision process.
• By the time Laggards adopt an innovation it has been possibly outmoded and replaced by something new and flashy.
• They are extremely suspicious and feel alienated from a rapidly changing society.
• This group probably bought their first black-and-white TV after color television was already dominantly used.
• Marketers and advertisers tend to ignore Laggards since they are not motivated by advertising or personal selling and will only purchase a new product when they absolutely have to.

90%
Innovators Early Adopters Early Majority Late Majority Laggards
50%
20%
5%
Time

Maturity Development &
Introduction
Growth
Moccasins
Oculus Rift
Tablets
Microsoft Surface Pro
Shoes
MS Windows
Decline
Crocs
Atari
Cassette players
VCR Players
Vinyl Records