Product Life Cycle

The “Product Strategy through the Life Cycle” is greatly affected by shorter product life cycles. Consumers are always seeking products that are newer, faster, better, cheaper and competition is always pushing new innovations onto the market – especially when it comes to electronics and mechanical products. Discoveries of new stronger materials have improved many products – conversely, some products are made and marketed to be used once or disposable. Consumers have created a throw-away society and are continually buying new products.

Technology factors into the continuous improvements and evolution of products (and services). Advances in electronic technology, digital media and Internet/smartphone platforms have essentially created a continuous change in product development. Consumers (especially early adopters who want the latest and greatest) struggle to purchase a product that isn't outdated the very next day.

Fierce competition to develop the latest product and trends has made much shorter product life cycles. Short life cycles present a challenge to marketers to determine needs of consumers and create messages to sell the new products or services. Marketers must make special considerations for marketing high tech products or services. Sometimes the consumer doesn't even know they need or want a product until it is developed (such as the iPad). Brands must also continually convince consumers that the product is newer, faster, cheaper – BETTER than the competition. 

Product levels and evolution

Product levels
Products that are near and dear to my heart are movies. If I have a rough day and want a laugh, I find a good comedy. If I have a date, I might choose a romantic movie or “chick flick” to share. Sometimes I am just in the mood for some action to escape my mundane daily routine. Sometimes movies help me to reminisce on memories from my childhood or friends. The content of these movies - the experience or feelings they evoke - provides a benefit to me. This entertainment value is the CORE level of the product, whether I am in a theater, at home or watching on the computer.

DVDs and Blurays represent the ACTUAL PRODUCT or tangible object of the movie. High definition picture quality and supreme digital sound add to the experience benefit. Technology has also allowed consumers to have a home theater with large screen and sound system – for the benefit of the “going out to the movies” experience in the comfort of their own home.

This leads to the third level - AUGMENTED products or services beyond the core and actual products. Some examples would be Redbox, Netflix, iTunes or cable on demand providers that can allow convenient viewing of movies whenever the consumer wishes. These types of services have rendered many brands (like Blockbuster and other movie rental stores) obsolete.


Product evolution – becoming obsolete
A product or “tool” that has gone through many variations in its lifetime is personal audio, or music media. Transistor radios allowed consumers, for the first time ever, to take a device along with them anywhere to enjoy music. Transistors got smaller and advances in circuit technology allowed for even smaller devices.

Photo: Gizmodo

Sony was one of the pioneers in mobile audio with headphones with the Walkman. These devices became popular in the 1980s with the ability to play cassette tapes (allowing consumers to choose their preferred music/artist). In the early 1990s the “Discman” allowed consumers to listen to compact discs (CDs) which saturated the market. Portable CD players offered limitations – vibrations would cause music to skip and CDs had a limited content capacity. Sony attempted to address these issues with the mini disc (MD) platform that didn't catch on among mainstream consumers, and quickly became obsolete.

Along came the iPod – and a series of paradigm shifts. Apple’s groundbreaking product allowed consumers to carry their entire music collection with them on one small device, with long battery life, no skipping and embedded information about the music. The iPod completely changed how music was consumed. It also revolutionized how music was purchased, marketed and even produced. The iPod would be the beginning of the iTunes music store, and completely change how consumers shop and purchase music – which would lay the groundwork for the iPhone.

At the turn of the century, iPods became the “standard” method of music consumption for consumers. Apple established itself as the leader in both hardware and software, with many other brands following suit and trying to imitate the popular device and digital music in general.

Throughout the evolution of the portable music device, cassettes and CDs have become inferior and obsolete due to convenience and cost of newer, more convenient and less costly products.

The digital media evolution has had the same effect on the photography industry – making film photography nearly obsolete due to cost and process. Digital cameras and camera phones have taken over as the fast, fun and “cool” option.

Positioning in the same space with different segment focus

Different companies compete in the same space with completely different targets or segment focus. From our Live Breeze session this week, we discussed headache/pain relievers and how consumers of different demographics, specifically age, have different needs. A young person may have a simple or major headache, pain from working out in the gym, or partying too much. An older consumer may seek out similar products for arthritis pain. Females also may have their own uses/needs for similar products. Drug manufacturers and marketers take these needs and values into consideration with their formulas, names and promotion. Some of these are specifically marketed towards older consumers with a container that isn't child proof.

Another product that comes to mind that is valued and viewed differently among a variety of consumers is the automobile. A 16-year-old simply wants four wheels and a gas tank to get from Point A to Point B – sometimes that same 16-year-old wants a sports car. The parent of that same 16-year-old wants their child driving the safest car possible. Some see their car as a status symbol and others simply want a red one. A consumer in their twenties has different style preferences than those in their sixties.

Sometimes brands are known for engineering, luxury and status. One brand that is known for all of these characteristics is BMW and is usually marketed towards those with higher income or older consumers. BMW is a good example of an auto manufacturer that has taken different approaches to market to different targets. BMW has vehicles that target the power-craving consumers as well as the economical/environmental drivers.

Demographics play a big role in automotive preferences. In areas with harsher winters, trucks and four-wheel-drive SUVs are more popular. In cities, consumers may prefer smaller, more economical vehicles. Family size and age can be a factor for determining preferred vehicle size. Some auto brands such as Volvo build their reputation around safety. This reputation and message appeals to parents with young passengers/drivers. Consumer research and purchase history can help manufacturers evaluate this market.

Fuel economy is a selling factor that has become more of a concern for consumers recently due to increased fuel costs. Some manufacturers have tailored their design and marketing to selling their car is fuel efficient. This is a challenge in the consumer minds to buy a car for better fuel economy when they may want a larger, more powerful option. Volvo has marketed their vehicle lines to get good fuel economy while still maintainingthe fun factor. 

Choosing a market segment and positioning

Once the marketer has a thorough understanding of consumers and segments, they choose specific segments to focus marketing efforts. Marketers consider consumers’ demand from each segment and also the competition in order to achieve the best possible sales results.

Companies collect data on product or service benefits and rate each group – then compare to competitor’s abilities to fulfill the consumers’ specific needs.

The first step is to eliminate any segments that cannot be easily or affordably reached and those which are outside the scope of the brand. Then, determine which segments offer the best opportunities and most possible profits. Then the marketers must assess how the brand will perform and compete in the market, while factoring in environmental threats. Marketers eventually weigh each segment, prioritize and develop strategies based on their evaluations.

After marketers choose target segments, they create a positioning strategy based on the previous market research. Positioning is highlighting a product or services benefits and differentiating it from any other choices in the consumers’ minds. Marketers determine one or more distinguishing characteristics of their product or service and develop a message to make the brand stand out. Positioning displays brand value.

Segmentation and consumer obsession

In order for marketers to get the best bang for their marketing buck and not invest time and resources to market consumers that will never respond, marketers dig deeper and focus on specific groups within a market. These smaller segments are based upon consumer behaviors and needs. 

One approach to market segmentation is to sort groups of consumers based on their specific behaviors that can be related to the product or service being promoted. Another method of market segmentation is to first determine the benefits of a product or service and then match to the needs of specific consumer groups. Sometimes one single product or service can have multiple benefits that may attract different consumers so the marketing has to be uniquely tailored to each of those groups.

This is consumer obsession at its finest – marketers step into the shoes of a concise group to determine their needs. Then they convince that group that their product or service will fulfill that need. The process begins with market research that reveals how consumers view specific products and services, and how they go through the decision making/purchasing process. Brands can adapt their marketing or even their product or service based on these findings.

Once the market is segmented and specific groups are targeted, marketers can create a profile of this consumer – often based on demographics. Then the consumer obsession turns to creating a message to reach the targeted consumers.

An example of consumer obsession segmentation is a recent development called Brandvantage (April 2, 2014) developed by The Pert Group. The research method is a unique study of how consumers make choices and factors in different life influences. It “helps organizations make more informed decisions on market segmentation, campaign development, creative execution, and more.”