Strategies
martes, 7 de diciembre de 2010
Strategies for introducing the product:
Taking into account that in this point there’s a new product that the customers don’t know, it’s of paramount importance to make an important investment on publicity, in order the customers get to know the product.
On the other hand, there are other points of view of different strategies in this case:
“The manager’s first option is a strategy of high prices, high quality and significant outlays for promotion and sales. The company then expects high future profits per product unit and a leading position on the market. It sets a high price for its products, i.e. a price that takes the maximum from the market (a high profit in a short time period).
The second option is a strategy of high prices with small outlays for promotion.
The application of this strategy is possible if there are buyers willing to pay a high price.
The third option is a strategy of fast market penetration, i.e. forming a low price, accompanied by high outlays for promotion. Sales rise quickly so, even though profit per unit is not high, total profit grows along with increased production. Actually, the low price and the “market penetration” strategies are implemented by companies whose primary goal is to capture a large market share in the shortest time period.” (Milićević, Ilić, & Cvetković, February 18th, 2010)
Strategies for growth stage:
The strategy that can be used this point is taking advantage of the differentiation and positioning of the product thanks to the publicity developed in the last point, the product can start to develop different strategies like discounts, contests, gave awards, without leaving on a side the investment on publicity; in order to be the first on the top of mind of the customer.
Also the following strategy can be developed:
“In order to retain the product’s position in this phase for as long as possible, management should also orient its efforts to the realization of non-price factors of competitiveness, such as product quality and design, favorable terms of payment, precision of delivery, and establishing solid business relations with customers.” (Milićević, Ilić, & Cvetković, February 18th, 2010)
Strategies for product maturity stage:
Based on the following:
“Consumers are acquainted with the product and have already-formed buying habits. It is harder to find new sales channels, since the existing network is already saturated. In order to maintain the position of the product, the company endeavors to redesign and modify the product by adding new content in the areas of placement, promotion and distribution.” (Milićević, Ilić, & Cvetković, February 18th, 2010)
The strategy that can be developed in this stage is to apply research and development on the product, to keep the innovation of the product and in that way gaining a better positioning on the market and in the top of mind of the customer.
Strategy for product obsolescence stage:
“the first thing to try in this phase is to lower prices to levels that still, with existing costs, ensure profitable production. If this strategy does not achieve the planned goals, the manager’s task is to gradually prepare the product’s withdrawal from the market” (Milićević, Ilić, & Cvetković, February 18th, 2010)
At this point there are two possible things to do, it can be what’s cited above, or the company can also invest in research and development implementing its product and finding a new channel to be sold in order to make it profitable again, this would take the product to the first phase again, the introduction one.
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