Intro Growth Maturity Decline

Introduction
Companies Focus
D is on Promotion and
O Production.
L Sales Product
L Awareness #1
A concern.
R
S Pricing
Profit
Strategies:
Skimming and
Penetration
TIME
Setting a high price in the intro. Stage: large Profit Margin
•Trendsetters – willing to pay the high price to own 1st
•Disadvantages
•High profits attract competition
•Profit maximization is short term
•Problematic if initial price is way to high

Setting a low price in the into. Stage: Goal create demand

•Most effective for products w/ elastic demand
•Advantage
•Large amount of product is sold to a wide range
of customers (demo, geo, and psychographic)
 Intro Growth Maturity Decline GROWTH
Characterized by:
D • Increasing
O sales and
L Sales Profits
L • Focus on
consumer
A
satisfaction
R • Competition
S increases
Profit
• Modifications
begin

TIME
Sales increase quickly (marketers want to keep the product at
this stage for a long time)
 Cost per item drops due to increased sales
 Price changes depend on how the price was set in the
introductory stage
 If skimming pricing was used in the introductory stage, the
price and sales should be closely monitored for a decline in
sales; then price will fall
 When penetration pricing is used, the price usually remains
unchanged but promotion is used to continue the high sales
 Intro Growth Maturity Decline Maturity
Characterized By:
D •Sales level off
O •Profits drop
L Sales •Competition heavy
L •Target market owns
•Marketing dollars
A
used fighting off
R
competition
S •Do you continue to
Profit
Modify product

TIME
Sales begin to fall

 Marketers search for other target markets by

introducing new uses for products, trying to stretch the
life of the product

Marketers look for psychological

Pricing methods to stimulate sales
From the competitors

For example, when a large portion of consumers have CD players.

Marketers will use modify product to maintain price or have sales.
 Intro Growth Maturity Decline Decline
Characterized by:
D •Profits could be
O Smaller than cost
Choices:
L Sales
Drop product
L
Sell / license prdt
A Regionalize prdt
R Modernize prdt
S
Profit

TIME
Sales decrease and profit margins decline

Price Discounts evident

for the product to
compete in discount
stores.

Example: Lever brother discounted

Pepsodent toothpaste and Lifeboy
Soap and advertised the products
with phases, such as “compare
and save”.
.
 Intro Growth Maturity Decline
How does this
D Compare to
O the Family
L Sales life cycle?
L
A
R
S
Profit

TIME