Advertising? Consider Product Life Cycle & Customer Buying Habits
Many advertising companies use the Product Life Cycle in order to create commercials tailored to a specific target demographic. In a typical Product Life Cycle, companies begin by building up interest in their product or service through mass marketing, then rely on word of mouth and referrals to increase their sales. After that point, they start utilizing more aggressive marketing techniques like pricing drops and promotional offers in order to move as much product as they can before the popularity wanes.
In theory, a company will see success with this process until it reaches maturity and saturation levels where consumers are no longer interested in purchasing the product or service anymore. This point is often considered the end of a product or service's life cycle. Once a product has reached its maturity point there are 2 routes the business can take:
(1) They can choose to keep pushing their product or service in hopes of a resurgence in sales through aggressive advertising and promotion (2) They can cut their losses and instead invest their resources into developing something new.
In theory, it seems like this is an ideal way to advertise since companies are able to quickly adjust to consumer buying habits. In reality, companies are stuck between a rock and a hard place. On one hand they can cut their losses, shut down any production and advertising, and move onto the next product. The problem with this is that if the company has spent any time building its brand or consumer loyalty it can be very difficult to transition to a new product line or service without experiencing consequences. Consumers might feel like the business is abandoning them after they've invested time and effort in purchasing the product. Furthermore, if a company has spent too much money on advertising it may not have enough funding left over to invest in a new product line or service.
Secrecy and marketing are closely tied. Even though a company might have spent a lot of money on advertising and branding, if it does not reveal the product or service to consumers via advertisements then no one will know about it. This is where word of mouth can come in handy for corporations. If customers are putting up positive reviews on social media sites like Yelp and Facebook, the business can build off their customer reviews to create brand loyalty, which can help them sell more products after they reach maturity.
If a company's product or service is similar to those that already exist in the market then they may not be able to create enough brand loyalty through social media reviews and consumer referrals. This is where aggressive advertising campaigns can come into play. For example, if a business has a product that is similar to another one then it may try to differentiate itself from the competition by creating an eye-catching advertisement campaign. In theory, this strategy makes sense since customers may not be able to tell what's different about the products besides their appearance. This doesn't work in reality because consumers often recognize brand loyalty and will only purchase the product they feel most connected to.
A company can also use its customer data to determine who is most likely going to purchase the product or service. It can then tailor its advertising to motivate these specific customers to purchase the product. The problem with this strategy is that it is an expensive process. The company must first create and test multiple advertisements in order to find the one or ones that will appeal most to consumers. It also means they may have to create a new advertisement for each region of the country, both online and offline, which can cost hundreds of thousands of dollars.
Another method businesses often take when advertising their product or service is by using celebrities as endorsers. This is often done in order to increase consumer trust in the product or service because consumers feel that if a celebrity endorses it then it must be good. However, even if a celebrity endorses a product it does not mean the consumer is going to trust it just because that person is trusted. The only way a consumer will have any sort of loyalty to the product or service is through reviews and recommendations from other consumers.
Author: Clair Vickers, Business Analyst - Q3 Call Center & Contact Center Management Solutions at Arizona Business Solutions
This article has been republished with permission from http://www.apollopages.com/blog/advertising-consider-product-life-cycle-customer-buying-habits/.
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Date posted: 2013-04-17T23:10:38.000+11:00
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Tags: advertising, customer buying habits, customer life cycle, product life cycle, product strategy analysis , strategys lead generation , life cycles, social media marketing blogspot , social media marketing strategies . . .
Comments (1)
Posted by: admin Date posted: 2013-04-18T23:11:15.000+11:00 A good start to look at marketing strategies!! Article Name Product Life Cycle and Marketing Strategies | Business Research Methods URL http://www.apollopages.com/blog/advertising-consider-product-life-cycle-customer-buying-habits/ Product Life Cycle and Marketing Strategies | Business Research Methods Your Name Your Email Address Comment
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Conclusion
The product life cycle is a valuable tool for executives to have in their management toolbox. It can help them predict the future growth and success or failure of a product. If consumers are no longer purchasing their product then it's time for a change. They can either choose to keep pushing their product or service in hopes of a resurgence in sales through aggressive advertising and promotion (2) They can cut their losses and instead invest their resources into developing something new.
In theory, it seems like this is an ideal way to advertise since companies are able to quickly adjust to consumer buying habits. In reality, companies are stuck between a rock and a hard place.