Commercial Applications
Identify the highlighted 'C' stage of the Product Life Cycle given in the image below and specify its any four features.
Marketing Mix
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Answer
Stage 'C' — Maturity Stage
In the Product Life Cycle diagram, the sequence of stages is: Introduction (A), Growth (B), Maturity (C), Decline (D), and Abandonment (E). The 'C' stage represents the Maturity Stage, which is at the peak of the sales curve.
Four Features of the Maturity Stage:
- Sales grow at a decreasing rate — During this stage, sales continue to grow but at a decreasing rate. Eventually, the sales curve levels off as the market reaches saturation, with supply exceeding demand for the first time.
- Intense competition — Competition increases further during this stage, and the markets get stabilised. The product is known all over the market, and many competitors offer similar products.
- Falling profits — Due to intense competition, prices are reduced, but promotional expenditure remains high. As a result, profits decline, and marginal producers are forced out of the market.
- Product differentiation and improvement — Manufacturers attempt to differentiate their product from competitors by introducing new models, broadening product lines, focussing on brand image, extending warranty periods, introducing reusable packaging, and finding new uses for the product.
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CASE STUDY
Innovation and brand consultant, Anisha Motwani, believes that free trials or sampling as a strategy is mostly prevalent and successful in categories that have deep seated habits and have high frequency of consumption. Brand switching in this category require attitude and behavior changes and free sampling influences customers to try new brands and thus increasing the probability of purchase. Such categories could include newspapers, food products, etc. Free trials can also be found in case of expensive offerings where consumers prefer sampling before making a final commitment……
Success of Reliance Jio in the intensely competitive Indian telecom market brings forth the strength of trial marketing strategy, even in the service industry. Reliance Jio Infocomm Ltd offered free sampling of Jio's voice calling, text messaging, and data services, and acquired stupendous 100 million subscribers, of which it continued to retain 72 million even after the free trial period ended.
Conventional wisdom suggests that brand that indulge in trials and discounts erode brand Value. Here's the reality though. People value brands. But people also seek value for money ……
Source:
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