PRODUCT LIFE CYCLE

DESCRIBE THE FIVE TYPES OF CONSUMERS IN THE CONSUMER INNOVATION MODEL AND EXPLAIN ITS RELATIONSHIP WITH THE PRODUCT LIFE CYCLE.

Successful advertising begins with understanding who your consumers are and how to meet their needs.  The consumer is the one who consumes the goods and services produced.  Products like people have been viewed as having a life cycle.  The product life cycle concept describes the stages new products go through in the market place.  These are introduction, grow, maturity, saturation and decline stages. 

The introduction stage is the stage where sales are low as a new idea is first introduced to a market.  Customers do not look for the product, they do not even know about it.  Informative commotion is needed to tell potential customers about the advantages and use of the new product.   The second stage of the product life cycle is growth.  At this stage there is rapid increase in sales and it is at this stage that competitors appear.  The innovators begin to make huge profits as more and more customers buy.  The next stage is maturity stage.  This is where competition gets tougher.  Many aggressive competitors enter the market to make profit. 

The saturation stage is next.  This is where the product is familiar to consumers and can be obtained easily.  Here industries embark on a lot of sales promotion such as gift vouchers for consumers, money back guarantee etc… The final stage in the product life cycle is the decline stage where new products replace old ones.  This is usually the most difficult stage for a company.

In view of the product life cycle, researchers have identified five types of consumers in the consumer innovation model.  These are innovators, early majority, laggards, early adaptors and the late majority. 

Innovators are consumers who are venturesome, highly educated and use multiple information sources.  This type of type of consumers will normally go a step further to seek more information on the product needed. Technological advances and mass communication tools help this group to acquire the information they need about the product.

The next group of buyers in the model is the early majority category. This group of consumers likes to deliberate on the product that is advantages and disadvantages of the product before purchasing. They also seek information on the product through informal social contacts before buying the product.

The third group of consumers is the laggards. This group may choose or purchase a product only when they are assured that they will not incur debts. They depend on neighbours and friends for information on the product they wish to purchase. They are also convinced if they see people especially close relatives or friends using the product.

The early adopters are also another group of consumers. They are mainly comprised of highly educated people or leaders in the society. Due to their status in the community, people seem to have confidence in the products this people use and may follow their footsteps.

The last group in the consumer innovation model is the late majority. These are consumers who are skeptical about product purchasing due to some past experiences with other products. This type of consumers are average in social status.

The life cycle of a product depends on sales to the various types of consumers, therefore industries must employ the right marketing and advertising techniques in influencing the consumer. These techniques will also determine the degree of importance and result of each stage in a products life cycle.

For any product to be successful, it must be purchased by innovators and early adaptors, This is because these people are widely respected and once the product is accepted by them, the adoption of new products moves on to the early majority, late majority and laggard categories.

Industries or manufacturers must realize that there is a big relationship between a products life cycle and the various categories of consumers. For example consumers may reject the use of a product in its introductory stages due to factors such as products not being compatible with existing habits, product not providing any incentive to change and risk barriers such as economic, social and psychological. Among the psychological barriers that exist are cultural differences or image.

Recognizing the concept of the product life cycle helps a marketing manager to remember that a product may need continual adjustments to present sales decline and to formulate a marketing strategy to stimulate sales.  Failure to recognize the life cycle conception has dramatic consequences for an industry.

REFERENCE

1.      Marketing (3^rd edt) Berkowitz, Kerin, Hartley, Rudelius

2.      Book Marketing (11 edt) Mc McCarthy/ Perreault

3.      Strategic Marketing Management – Craven and Lamb

categories of consumers

Discuss the two major characteristics of consumers and their characteristics in the consumer market and the business market.

The consumer is the one who consumes the goods and services produced. Mahatma Gandhi said a costumer is the most important visitor in our premises. He is not dependent on us, we are on him. He is not an interruption to our work; he is the purpose of it.

The different types of consumers are combined within several major categories: the consumer market and the business market. Amid these two major categories the consumer market is comprised of individuals and households that purchase goods and services for personal consumption whereas the business market encompasses organizational entities that purchase goods and services for their use in the production of other products and services for the purpose of reselling or renting to others at a profit. Business market poses a smaller amount of large buyers unlike the consumer market.

With the consumer markets or people who purchase goods and/or services for their personal consumption, buying is centered on certain factors and they may exhibit certain characteristics. The consumers market’s behavior is influenced by four key sets of buyer characteristics which are cultural, social, personal and psychological.

The cultural aspect entails social class and group wants and behavior. Social incorporates the factors of influences by family and small groups that determine ideal brands and products; Personal adapts the different age groups and lifestyles and psychological utilizes motivators and perceptions of beliefs and attitudes.

Aside these, other consumer characteristics include the geographical location of the consumer. This involves where people live – not just the region but might include, post code groups, whether it is a rural or urban area, whether it is an estate, private housing, etc. The nearness of the product or service to the consumer is of major importance to the consumer. This may influence the consumer’s decision to purchase the product or service.

Another characteristic of the consumer is the demographic location. This includes the age, occupation, educational background, income, gender and family size of the prospective consumer or buyer – Age and life cycle because people change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture and recreation are often age related. Also a person’s occupation affects the goods and services bought, for instance, people who work in banks and telecommunication industries will buy more suits whilst those who do not work in such industries will not. Furthermore, a person’s economic situation will affect product choice. If economic indicators point to a decline then purchasing power will also decline respectively.

Consumer’s lifestyle is also an indicator. People coming from the same social class and occupation may have quite different lifestyles. Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It includes work, hobbies, shopping, sports and social events whilst interest of the consumer may include food, fashion, family and recreation.

Individual consumers and organizational consumers are different from one another based on their consuming and purchasing behavior such behaviours can vary from the different influences and understanding of the consumers purchasing characteristics.

Research has shown that consumers make their purchase decisions based on five stages, which are, need recognition, information search, evaluation of alternatives, purchase decision, and post purchase behavior. Need recognition is when the buyer recognizes a problem or need. The buyer senses a difference between his or her actual state and some desired state. Needs could be hunger, thirst, class, etc.

Second stage is the information search where the consumer may or may not search for more information. If a consumer finds a satisfying product at hand the consumer is likely to buy, if not the consumer undertake information search related to the need. Consumers may often ask friends, relatives, acquaintances or professionals for recommendations concerning a product or service.

The third stage is for the consumer to evaluate alternatives. Here the consumer uses information to arrive at a set of final brand choices. Consumers evaluate purchase alternatives depending on the individual consumer and the specific buying situation.

The next step is the purchase decision. Here the consumer ranks brands and form purchase intentions. Normally the consumer’s decision will be to buy the most preferred brand. Decisions may be made based on income, price, and expected benefits of the product or service.

Finally, we look at the post purchase behavior. After the product has been purchased, will the consumer be satisfied or dissatisfied. If the product falls short of expectation, the consumer is disappointed but if it meets expectation, the consumer is satisfied.

In general, consumers face four types of purchase decisions. The first type is the minor new purchase. Those purchased represent something new to a consumer but in the customer’s mind it is not a very important purchase in terms of need, money or other reason. The second type is the minor old or re-purchase. These are the most routine of all purchases and often the consumer returns to purchase the same product without giving much thought to other product options.

The third type is the major new purchase. These purchases are the most difficult of all purchases because the product being purchased is important to the consumer but the consumer has little or no previous experience making these decisions.

The last type is the old/re-purchase. Here the purchase decisions are also important to the consumer but the consumer feels confident in making these decisions since they have previous experience purchasing the produce. For marketers and advertisers it is important to understand how consumers treat the purchase decisions they face.

CRITERIA FOR CHOOSING ADVERTISING AGENCIES

By what criteria would you select a particular advertising agency to promote your campaign?

An agency is an organization that does promotional jobs for another organization through creative development in copywriting and art direction also media planning and buying.

There are basically three types of agencies; these include the full service agency, limited service agency, and the ‘a la carte agency’.

A full service agency is an agency which does the total marketing communication hob for an organization. Their services include creativity, strategic planning, production, media planning and buying and market research.

The next type is the limited service agency. There the agency specializes in particular elements of marketing communication for an organization. For example, an advertising agency could only focus on designing and development of advertisement.

‘A la carte’ agencies provide a wide range of services from a range of different specialist agencies.

Choosing an advertising agency is not an easy and brief process because the agency is one of the marketing tools that will determine the success of a campaign. International advertising entails dissemination of a commercial message to target audiences in more than one country. Target audiences differ from country to country in terms of how they perceive or interpret symbols, respond to humour or emotional appeals as well as levels of literacy and language spoken.

When selecting an advertising agency it is therefore necessary to establish criteria on which the decision will be made.

First the quality of the agency must be ascertained. This means the agency must have the best team to handle your product, research into the organizations portfolio, their track record, and how successful they have been in marketing or advertising new products. Do not allow your product to be handled by junior staffs, seniority should be applies on all sides of the Accounts team planning, Accounts Service, Creative and Media.

Secondly, look out for the agency’s market research and Public Relations. This entails the agency’s ability to come up with quality research; A detailed research that outlines information on the consumer, competition and cost. The Public Relations department of the agency should be able to create a sustainable corporate brand and an overall company image with the market place.

The next criteria to look out for are the ability of the agency to coordination international campaigns. Here you look out for an agency which has offices in the central business district capitals of targeted countries.

The size of the agency’s international business: This refers to the size of distributors, wholesalers, customers, etc. The bigger the organization the more trusted they are to handle the product.

Other criteria to look out for are the level of control desired by the company. This is very important because the company needs to overcome communication barriers such as laws, tradition and cultures, religion, social mores such as gestures, mannerisms, etc. the agency must be one who can prevent anything from interfering with your message in other for your company to achieve the desired result; also, the communication network of that agency and its other branches across the world.

Finally the international agency chosen must have the ability to cover relevant markets. The agency must have the appropriate means of reaching all the targeted markets. The agency must have extensive networks of offices in the countries where it wants to reach in order to coordinate the advertising process in all countries where they have their targeted audiences.

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