Introduction Stage
In this period, sales build slowly while the product has not recouped the resources put into its development during this stage. At this stage, an organisation should build product awareness and develop a market for the product; this is an expensive stage for an organisation when they launch a new product because the market for the product is small, sales are low and advertising costs are high. Any costs associated with the development of the product, i.e. R&D (Research & Development), consumer testing, and the marketing required to launch the product, can be very high. This is usually the case when it is a competitive sector.
The impact on the marketing mix are:
- Product – branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained
- Pricing – may be low penetration pricing to build market share or high pricing to recover development costs
- Distribution – this is selective until consumers show acceptance of the product
- Promotion – this is aimed at innovators and early adopters where marketing communications seek to build product awareness and to educate potential consumers about the product
Growth Stage
The product “takes off” attracting an early majority of buyers encouraging repeat purchases and gaining volume and market share, profits start to increase. It is typically characterised by strong growth in sales and profits, and because an organisation will begin to benefit from large batches of production the profit margins and value will increase. Therefore an organisation can look at investing money into promotional activities that will maximise the potential growth at this stage, ensuring that brand preference grows which will increase their market share.
The impact on the marketing mix are:
- Product – quality is maintained, and additional features and support services may be added
- Pricing – is maintained as the company enjoys increasing demand with little competition
- Distribution – channels are added as demand increases, and customers accept the product
- Promotion – is aimed at a broader audience
Once the trainer prototype moves from the new product development stage, the other activities will all happen relatively quickly. The marketing team will have already been heavily involved with the research and creation of the trainer designs and played a key role in answering the questions all businesses want to know when considering new products (costs, market share, profits, etc.)
If you want to gain a better insight into modern marketing within any type of business, The IoSCM Introduction to Marketing Award will provide you with the knowledge and understanding you need.
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