Page 300 - Foundations of Marketing

Product, Branding, and Packaging Concepts | Chapter 10 267

Figure 10.2 The Concepts of Product Mix Width and Depth Applied to U.S. Procter & Gamble Products

Laundry
detergents Toothpastes Bar soaps Deodorants Shampoos Tissue/Towel

Ivory Snow 1930 Gleem 1952 Ivory 1879 Old Spice 1948 Pantene 1947 Charmin 1928
Dreft 1933 Crest 1955 Camay 1926 Secret 1956 Head & Shoulders Puffs 1960
1961
Depth Tide 1946 Zest 1952 Sure 1972 Vidal Sassoon 1974 Bounty 1965
Safeguard 1963
Cheer 1950
Bold 1965 Oil of Olay 1993 Pert Plus 1979
Gain 1966 Ivory 1983
Era 1972 Infusium 23 1986
Febreze Clean Physique 2000
Wash 2000 Herbal Essence 2001

Width

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Introduction

The introduction stage of the product life cycle begins at a product’s first appearance in the
marketplace, when sales start at zero and profits are negative. Profits are below zero because
initial revenues are low, and the company generally must cover large expenses for product
development, promotion, and distribution. Notice in Figure 10.3 how sales should move
upward from zero, and profits also should move upward from a position in which they are
negative because of high expenses.
Potential buyers must be made aware of new-product features, uses, and advantages.
Efforts to highlight a new product’s value can create a foundation for building brand loyalty
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and customer relationships. Two difficulties may arise at this point. First, sellers may lack
the resources, technological knowledge, and marketing know-how to launch the product suc-
cessfully. Entrepreneurs without large budgets still can attract attention, however, by giving
away free samples, as Essence of Vali does with its aromatherapy products. Another technique
is to gain visibility through media appearances. Dave Dettman, a.k.a. Dr. Gadget, specializes
in promoting new products on television news and talk programs. Companies such as Sony,
Disney, Warner Brothers, and others have hired Dr. Gadget to help with the introduction of
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new products. Second, the initial product price may have to be high to recoup expensive mar-
keting research or development costs. Given these difficulties, it is not surprising that many
products never get beyond the introduction stage.
Most new products start off slowly and seldom generate enough sales to bring immedi-
ate profits. Less than 10 percent of new products succeed in the marketplace, and 90 percent
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of successes come from a handful of companies. As buyers learn about the new product,
marketers should be alert for product weaknesses and make corrections quickly to prevent
product life cycle The
the product’s early demise. Marketing strategy should be designed to attract the segment that progression of a product through
is most interested in the product. As the sales curve moves upward, the breakeven point is four stages: introduction,
reached, and as competitors enter the market, the growth stage begins. growth, maturity, and decline
introduction stage The initial
Growth stage of a product’s life cycle—
its first appearance in the
During the growth stage , sales rise rapidly; profits reach a peak and then start to decline (see marketplace—when sales start
Figure 10.3 ). The growth stage is critical to a product’s survival because competitive reactions at zero and profits are negative
to the product’s success during this period will affect the product’s life expectancy. When
growth stage The stage of a
Truvia, a natural sugar substitute, was introduced, demand rose quickly. Although Truvia is product’s life cycle when sales
more expensive than other sugar substitutes, its popularity has prompted Coca-Cola, Pepsi, rise rapidly and profits reach a
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and Kraft to begin using Truvia in certain products. peak and then start to decline

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