TOPIC 1

MARKET POSITIONING AND MANAGING PRODUCT LIFE CYCLE

1.1 MARKET POSITIONING

The act of designing the companys offerings and image to occupy a distinctive place in the mind of the target market.

Without differentiation, a product will be viewed as similar to other products.

The market positioning desired should be achieved by the product which is being offered.

1.2 BASES OF POSITIONING

A business or a company can be differentiated based on five aspects:

The product itself Services offered Company staff or personnel Distribution channel used Company image

1.2.1 Based on Products Differentiation

Form Most products can be differentiated based on products design like size, shape or physical structure. Some are round, cylindrical, square and others. Features Most products can be offered with varying features or accessories that supplement the products basic function.
Quality Most products can be differentiated based on the quality of the product itself.

Product quality can be measured according to: Performance Durability Defect Free Fit and Finish Brand Features

Design and Style Design and style offers a good way to differentiate and position a companys products.

1.2.2 Based on Services Differentiation

Services that can be used as market positioning are delivery services, fixing, maintenance, staff training and repair work

1.2.3 Based on Channel Differentiation

Intensive Distribution Sells its products in as many shops as possible; to enable consumers to purchase the products anywhere
Exclusive Distribution Distributes its products in exclusive stores only.

Selective Distribution Manufacturer will select a few stores to carry its products. Purpose: build relationships with few stores to provide excellent service to cust.

1.2.4 Based on Staff or Personnel Differentiation

Trained, dedicated, friendly, self-confident, capable and honest personnel are a few basic examples that can be used to differentiate a company from its other competitors.

1.2.5 Based on Image Differentiation

Images are created through advertisements that are passed on to consumers. Image and brands are differentiating factors that are the most difficult to be copied by competitors.

1.3 PRODUCT LIFE CYCLES

Product life cycles can be divided into 4 stages, which are: Introduction stage; Growth stage;
Maturity stage; and

Decline stage.

Refer figure 1.2: p 7

1.3.1 Introduction Stage

The product is newly introduced. Consumers are not aware of the product.

The market positioning strategy: Increase the volume of advertisements to create consumer awareness.

Increase the number of distributors to distribute the products to the consumers. Pricing the product high or low depending on the suitability of the market. Pricing the product high if the product is new and has not existed in the market before.

1.3.2 Growth Stage

Sales increase tremendously. Consumers are aware of the existence of the product in the market. Profit increases and is at a profit-making level.

The market positioning strategies: Continue the advertisement campaigns to build awareness, interest and confidence among the consumers.

Appointing more distributors to ensure the products can be purchased by a larger number of consumers. Slashing product price if it was priced too high during the product introduction stage. Slashing the price will increase the number of purchasers and it will scare off competitors who are beginning to enter the market. Expand factory and company operations to fulfil increasing demands from the consumers.

1.3.3 Maturity Stage

Profits and sales start to reach the maximum level. Many competitors in the market.

Market positioning strategies: Offer products with improvised design, enhanced quality and features. Figure 1.4 depicts Pepsis soft drink design that has been modified according to time.

Offer new models to the existing product lines. The advertising campaigns have to be continued to build consumer trust and loyalty.
The price offered is lower or at-par with the competitors price. Own wide and excellent distribution networks. Able to obtain economies of scale to enable the company to price their products lower and control a bigger market share.

1.3.4 Decline Stage

Sales and profits decline until there arent any sales or profits anymore due to better product replacement

The market positioning strategies: When the technology changes rapidly and the consumer demand declines sharply, it is better for the company to cease the products production.

When there is continuous demand for the output, the company can continue to produce the product at a smaller quantity from time to time until there isnt any new production.

1.3.5 Product Life Cycle Patterns

Fad product life cycle Style product life cycle Seasonal product life cycle

Fad Product Life Cycle

Fads are fashions that come quickly into public view, are adopted with great zeal but decline very fast

Style Product Life Cycle

A style is a basic and distinctive mode of expression. When style is created, it will exist for a few generations. Then, it will disappear and reappear

Seasonal Product Life Cycle

Life cycles that vary by season