Page 40 - Marketing the Basics 2nd

32 Marketing: the Basics
As more and more customers adopt the product, the product enters the growth stage. Here, sales revenue grows quickly, costs per unit decline and profits increase because the product experiences positive economies of scale. Once sales of the product have peaked, the product enters a phase of maturity. Eventually customers’ tastes change contributing to the product’s decline and possible elimina- tion from the marketplace altogether.
The concepts we have been covering thus far in this chapter are firmly based in marketing today and will undoubtedly be useful for many years to come. In the next section we will turn to two key emerging areas in marketing. In some cases a product can enjoy what is called a ‘scalloped’ life-cycle with new growth taking place during the decline stage bringing new life to a moribund product. Cow Brand baking soda did this a few years ago. With fewer people baking at home, the sales of baking soda declined. A clever marketer breathed new life into sales by finding a new application, using an open box of baking soda to remove bad smells in a refrigerator. Though one suspects cleaning the refrigerator would do a better job, nevertheless many started adopting the product for this use.
THE EXPERIENTIAL ECONOMY
‘The fox knows many things, but the hedgehog knows one big thing’. There are few things we can say with confidence, or at least some confidence, about the future. One of those few for us is that we are in the midst of a massive move to an experience economy.
For much of the nineteenth century the West’s economy was dominated by an extraction or commodities economy. Starting in the late eighteenth century the British started the Industrial Revolution and were the dominant manufacturing power during that century, though France, Germany and the US also had important parts to play. At its peak Britain was manufacturing over 50 per cent of the finished products in world trade. Much of the rest of the world was left behind; even the US was still dominated by agriculture and other commodity businesses. Starting in the early twentieth century, but especially after World War II, manufacturing became more central.