Tag Archives: business plan

Long Live your Product (with Life Cycle Management)

Countless products are launched every year, landing in the market with a reason to be, a well thought out way to connect with the consumer and hope that the investment will pay off for the brand owner. But what comes next?

Product Life Cycle Management is the key to ensuring your brand thrives year in and year out. This post will help you understand its importance to your marketing strategy and give you the tools you need to identify the different stages of your products life cycle and strategies to maximise growth throughout.

What is Product Life Cycle Management?

I love a good analogy as much as the next marketer and this one was just too hard to resist.

Think of your product like roses in your garden, it is not enough to simply plant (your new product in the market), water it (with promotions occasionally) and expect it to flower year after year. At some point, its vitality is going to dwindle and you need to either deadhead them or dig them up and start again.

The product life cycle (PLC) refers to the stages a product travels through from launch to eventual obsolescence. Managing the PLC is an important part of your marketing strategy and guides you in adapting your approach by product, to ensure you are promoting, developing and phasing out products at the right time.

Four Stages of the Product Life Cycle

Product Life Cycle Management

1.      Introduction

This is identified as the launch stage of your new product.  Sales are increasing slowly, as there is currently limited awareness. Costs are high with large amounts of advertising and promotion required as well as the product development and production costs having been incurred.

The introduction stage will see your business operating at a loss and so this is the most critical stage in your product lifecycle, ideally  you want to move through this stage quickly. Understandably this is where the  highest percentage of failure occurs.

Strategies for success during the introduction phase:

  • Clearly define your market so that at launch you  are effectively targeting the consumer most likely to become your customer
  • Build a dominant market position, stand out from  your competition, don’t just be a “me too” product, have a unique reason for consumers to connect with over the competition
  • Pioneer something; be the first to launch, a true new product is rare but valuable (See Ideas and Innovation).
2.      Growth

Once awareness has increased and with an appropriate distribution strategy, you will identify that your product is in growth, which will be when you first break even (this will be discussed in next week’s post on Measuring Success) and begin to make a profit.

When your product is in growth, the market has accepted your product and consumers are trialling it. This is the time to increase your distribution to make sure you are matching supply of your product with demand.

During growth, naturally, competitors will enter the market. Noticing a new popular product will motivate them to launch similar products in order to capture some of the market (see Get Competitive with your Competitors).

Strategies for success during the growth stage:

  • Monitor pricing to ensure you stay competitive against new competitive offers
  • Confirm your actual customer matches your forecasted target customer and adjust your message. For example we have a launched a building and construction product for children, but on researching sales we find out it is popular amongst teens. We therefore want to ensure our marketing and promotions do not exclude teens by being too “childish”
  • Look for new distribution channels – use your sales history to sell the product in and growth your market share
3.      Maturity

Your product can be identified as being in its maturity phase when sales volume slows down and beings to plateau, that is becomes “stuck” at a certain level, stops growing and may be just slightly declining. This is the sign that action is needed or your product will begin to rapidly decline.

Products reach maturity for various reasons including competition reaching saturation, price wars giving unpredictable volume (this week’s special gets the sale) and the initial excitement for the product settling. This leads of course to a decrease in profit, both from a decrease in sales but also from an increase in promotional expenditure.

Strategies for success during the maturity stage:

  • Apple is the first company that comes to mind that demonstrates innovative product lifecycle management. Realising most mobile phone users are on 18 – 24 month contracts, Apple releases a new modified iPhone around every 18-24 months, by addressing that the current model is reaching maturity and releasing an update they effectively refresh the product lifecycle back to introduction and growth every two years. The result is a loyal following that feels they are up to date with the latest technology and will not move to a competitive offer
  • The Apple example illustrates the strategy of modify or relaunch. Create new news and interest around your product. Survey your customers (See Market Research ) to find out what is missing from your product; monitor your competition (see Get Competitive with your Competitors) and find out your competitive gaps; re launch your product to recapture market share and return your product to growth
  • Look for new users or new uses for your existing product and develop strategies to communicate and increase awareness for your product with these groups
  • Create new promotions, competitions and offers to maximise sales of your product while it is in its maturity phase
4.      Decline

This phase is identified by both a decline in sales volume and tapering off of profits. Allowing the product to reach decline should be strategic, meaning you identified the product in maturity and planned that it would not be refreshed, but instead would be deleted at some point in the future.

The choice to let a product decline can be as there is a new product planned for launch which will replace the current product but is not going to be positioned as an update or refresh.

Strategies to minimise loss during decline:

  • Minimise spending promotionally rather than trying to stimulate sales with competitions and discounts, allow sales to taper off naturally
  • Decrease the number of SKUs over time, so delete the worst performing sizes or colours first so you have a tighter offering in the market, then gradually run out of the product

The most important advice for using PLC management in your marketing strategy is to regularly review your sales volume and profitability; this is where the flags will be going up that will help you identify what stage your product is in, allowing you to plan your products life more effectively.

What stage in product life cycle is your product in? What are you planning to do, to maximise that stage?

Until next week L is for the life cycle of your products and also for the lifecycle of the rose, which evidently go from maturity back to growth every year, if only we could bottle that ability!

Mary-Anne

www.wiseupmarketing.com.au


Business Jargon 101

Starting out in small business, we all find ourselves in conversations; whether they are about marketing strategies, sales strategies or just a ‘getting to know you’ networking chat, before you know it someone drops a 3 letter acronym and off your mind wanders trying to work out what on earth it means.

Welcome to Business Jargon!

This post will get you up to speed on the most common abbreviations and buzz words so you can drop your own J-bombs and feel nice and smug.

10 Useful Business and Acronyms

We marketers are by nature a talkative bunch, so it seems somewhat surprising that we want to shorten anything. However the temptation to create a three letter abbreviation gets the better of us. I remember starting at Revlon and being handed a glossary of terms for the business where they recognised they used so many acronyms that they had created a beginners guide!

  1. SEO Search Engine Optimisation – making improvements to your website so that it indexes high in search results
  2. SOH Stock on Hand – how much of your product or product components you currently have in stock
  3. WAHM / WAHP Work At Home Mum / Work At Home Parent – the extremely talented and overstretched business owners who run their business whilst wrangling toddlers, calming babies and making school lunches
  4. PPC Pay Per Click – online advertising where you are only charged when a user clicks on your advert. The ad will appear in the advertising network for free.
  5. CRM Customer Relationship (or Retention) Management – your marketing strategies concerned around getting repeat business. Think of FlyBuys as a classic CRM program.
  6. CMS Content Management System – a tool that lets us non-technical people create & update web pages without knowing HTML
  7. B2C / B2B Business To Consumer / Business To Business – used to classify your business type by who your end user is
  8. ATL / BTLAbove the Line Below the Line Marketing Above The Line / Below The Line – seen most often in job advertisements for marketers! The theoretical line separates the communication types. Traditionally ATL is mass media promotion such as TV and Print, BTL is more targeted promotions such as direct mail and in store promotions.
  9. eDM Electronic Direct Mail – preceding this we always talked about DM (Direct Mail), so cleverly a lower case e was placed in front, to play on eMail. eDM is when we email out promotional offers to our customers and potential customers
  10. UGC User Generated Content (which I would also class as a Buzz Word) – is all about interacting with your target market and letting them take (some) control of your brand and its activities. UGC can take the form of customer’s blogging on your behalf or customers uploading photos and videos to your social media spaces

10 Business and Marketing Buzz Word Definitions

Once you manage to navigate the acronym mine field, the next biggest jargon challenge you face are buzz words. These words change from year to year, but once a buzz word is deployed it seems to reach celebrity status with everyone finding an excuse to cram as many as possible into one sentence.

business marketing jargonWorking on a Brand Strategy document with a group of co workers last year we did our best to come up with the most powerful sentence possible. It went something like “We need to think outside of the square to leverage any white space opportunities, whilst fully capitalising on any low hanging fruit”. Understandably this was after days of workshopping and being fairly over it. I just came across this game from Malcom Auld which could have helped us get through. Click here to play along.

  1. Low Hanging Fruit – I believe I was exposed to this phrase in 2009. Unfortunately the person who used it paired it with a squeezing two imaginary pieces of fruit hand gesture, making it hard to keep a straight face
    when later repeating it. Low hanging fruit are the easy wins – the opportunities that will take minimal effort for you to action.
  2. White Space – Arriving in 2010 to replace low hanging fruit as the ‘must drop in a sentence’ buzz word in the office. White space (which I liked to whisper for dramatic intent) is the gap in the market; it’s something that no one else is doing and gives you chance to grow the market in both size and your share.
  3. Think outside the Square – We all know what this one means but it doesn’t stop it from being used, almost redundantly to suggest we need to be creative to solve our current problem. We need to come up with a solution that everyone else isn’t doing.
  4. Mind Shift  – Whether it is our organisation or our consumers, we often talk about needing a mind shift. A mind shift needs a different approach to thinking inside our business or it’s about our consumers being educated about a new way to meet their needs which will become their new norm.
  5. Blogosphere – Is the realm where all blogs exist on the internet. It sounds more impressive than straight out saying that.
  6. Reputation Management – Tracking what people are saying about you online and proactively responding to feedback, to ensure your online reputation is positive and reflective of your brand.
  7. Exit Strategy – This is the plan of what to do with product in the retail environment if it doesn’t sell. A new retailer may want to know if there is an exit strategy as part of their trading terms. The economic downturn really brought out exit strategy as a buzz word in sales meetings.
  8. Customer-Centric. We talk about creating a Customer-Centric business, meaning we want to focus on our customer, be the solution to their problems and put their needs as the objectives we need to meet.
  9. Webinar – Ok so this is a little less buzz word and a little more of a buzz strategy. A webinar is a seminar or presentation held on the web. Think of it as a mass video conference. People can watch from anywhere and it is usually available for viewing after the live event.
  10. Viral Marketing – Creating and executing a promotional element that is so exciting that it is sent out by consumers through their networks (In
    other words spreading like a virus!)

Buzz Words are always evolving and today’s hot ticket quickly becomes passé, so if you want to talk the talk be sure to keep up to date on the latest buzz words.

Now that you are up to speed on what’s what, we would love to help grow your business with our Wise Up and Grow report, where you fill out a BAT (that’s our Business Analysis Tool) and we give you some great advice on your SEO, help you identify your Low Hanging Fruit and think outside the square to ensure your CRM is on track.

Let me know if you have any great buzz words or need a 3 letter acronym demystified.

Until next week J is for Jargon (thanks Melanie) and also for the Jigsaw puzzle (thanks Katrina) we are all putting together as we Journey through the A-Z of Marketing

Mary-Anne

www.wiseupmarketing.com.au


Get Competitive with your Competitors

Competitors are the concern of all businesses, no matter their size. Too often we wait until sales have dropped unexpectedly or enquires are down until we look at what the competition are doing. In this post we will discuss how to get competitive with your competitors, to ensure you stay at the front of the pack and connect with your target market.

How to Identify your Competitors

When we ask our clients who they see as their competitors, they always have a list of 3 or 4 businesses offering the same or similar product or service. When we do our competitive analysis as part of our Mini Marketing plan, we generally find quite a few more.

Why the difference? As a business owner, when you look for competitors you tend to think as a business owner. “My business is selling flowers online. What other major online florists are there?” When we identify competitors for a client, we
think like a consumer “My mum’s birthday is coming up, what could I get delivered to her?” All of a sudden we find fruit baskets, chocolate hampers and gift vouchers as competitors for our online florist.

We see most businesses as having two types of competition:

Direct Competitors

These are the companies offering the same or similar product or service. These are our most obvious competitors, but not always our biggest. E.g. Gilette vs Schick Razor, Cornflakes vs Weet Bix, Channel 7 vs Channel 10 etc

Indirect Competitors

These are the substitutes for our type of product or service. These are not always as obvious and are where we need to think like our consumer and understand the options available to them. E.g. Razors vs Wax Strips, Cereal vs Toast, TV vs
watching a DVD etc

So to identify your competitors, consider the substitute categories too and you will have a more complete idea of who your competitors are.

Update your Market Analysis

Many businesses start off with a Business Plan or a Marketing Plan or some points in a notebook on how they could turn their hobby into an income stream. As part of this planning process, formally or not, we tend to do a Market Analysis.

We ask ourselves:

  • Where does my offer sit in the market?
  • Is there demand for it?
  • Are there competitors? Are they doing a good job?
  • Is the market saturated with offers or is it fairly open for a new entrant?
  • Is that market a good size or is it small and niche?
  • What are consumers willing to pay?
  • What is my competitive advantage?

We do a fairly thorough job in attempting to answer those questions. We launch our business and we rarely reassess. When we ask our clients who they see as their competition, they stop and think, they even do
some fresh research and overwhelmingly we hear “Wow! Now that I’m looking I’ve noticed a few more have popped up”.

We recommend a scheduled maintenance program (just like servicing your car)

Competitor Analysis Schedule

Don’t Get Mad, Get Even

Just like when you launched and took share from other players, new businesses are launching all the time and a few are after your piece of the pie, these competitors want to take your consumers and make them their own.

If you follow our scheduled maintenance program above, we are sure your top 5 list of competitors will be constantly changing and we are sure you will find new entrants that look and sound surprisingly (and frustratingly)
like they are trying to be you!

It’s a compliment really; they are competing with you because you are on their top 5 list. Your business is being perceived as successful, credible and desirable and so you are a threat.

The best way to get even is to be even better at what you do. With our scheduled maintenance program, every month you are going to review your top 5 competitors and as part of that you should look at:

  • What part/s of their offer is stronger than yours?
  • What part/s of their offer is weaker than yours?
  • How are they promoting?
  • How many touch point’s they have? E.g. Website, Storefront, Blog, Twitter, Facebook Page, Newsletter
  • How you can stay up to date with their touch points E.g. Subscribe, Like, Follow, Visit

Then take that information and learn from it. Learn how to put your own spin on what you see as working well for the competition. For example, if you are an online florist and a competitor has just put up a section on what flower for what occasion, think how you could implement a similar page, but in a way that it reflects your brand and its communication style.

Competing with your competitors requires you to invest time in monitoring the competition regularly. At a minimum, aim to do the annual review – you’ll be glad you did! We offer a thorough competitive review a part of our Mini Marketing Plan package and sometimes it really works to have an outsider look in with a fresh perspective. Get in touch if you’d like to know more.

Until next week C is for Competition and also for creativity.


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