the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start acquiring small pioneering firms, and profits are healthy.
In this stage, consumers are aware of the product but have made no judgment concerning the relevance of the product to a problem or recognized need. Knowledge of a new product is considered to be result selective perception and is more likely to occur through the mass media than in late stages which are more influenced by opinion leaders.
But this does not work always various models have been given by marketing analysts after examining the process of both adoption and diffusion. The first was called AIDA (Awareness, Interest, Desire, Action), other alternative Models were also conceptualized but with different terminology and with same process (shown in Fig 10.5).
Introduction Stage When a product first launches, sales will typically be low and grow slowly. In this stage, company profit is small (if any) as the product is new and untested. The introduction stage requires significant marketing efforts, as customers may be unwilling or unlikely to test the product.
The Product Life Cycle (PLC) defines the stages that a product moves through in the marketplace. Oligopolistic Market The primary idea behind an oligopolistic market (an oligopoly) is that a few companies rule over many in a particular market or industry, as it enters, becomes established, and exits the marketplace.
1. Introduction Stage. When a product first launches, sales will typically be low and grow slowly. In this stage, company profit is small (if any) as the product is new and untested. The introduction stage requires significant marketing efforts, as customers may be unwilling or unlikely to test the product.
Slowly reducing distribution channels and pulling the product from underperforming geographic areas. Such a strategy allows the company to pull the product out and attempt to introduce a replacement product.
The underlying goal in the introduction stage is to gain widespread product recognition and stimulate trials of the product by consumers. Marketing efforts should be focused on the customer base of innovators – those most likely to buy a new product.
Economies of scale are realized as sales revenues increase faster than costs and production reaches capacity. Competition in the growth stage is often fierce, as competitors introduce similar products. In the growth stage, the market grows, competition intensifies, sales rise, and the number of customers increases.