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• Module overview
• 1. What is marketing?
  • 1.1 What is marketing?
    • 1.1.1 Different uses of the term 'marketing'
    • 1.1.2 Different levels of marketing
    • 1.1.3 A definition of marketing
  • 1.2 Clarification of the marketing definition
    • 1.2.1 Outputs
    • 1.2.2 Inputs
    • 1.2.3 Exchange
  • 1.3 Development of marketing
  • 1.4 Types of marketing
  • 1.5 What is a service?
    • 1.5.1 Characteristics of services
    • 1.5.2 A service definition
    • 1.5.3 Classifications of services
    • 1.5.4 Services: a growth sector
  • 1.6 Marketing in the maritime industry
  • 1.7 Towards social and ethical responsibility
    • 1.7.1 Common criticisms of marketing
    • 1.7.2 Social impact of marketing
  • 1.8 Summary

• 2. Strategic marketing management

  • 2.1 Introduction
  • 2.2 The environments
    • 2.2.1 External environment
    • 2.2.2 Internal environment
    • 2.2.3 Mission statements and objectives
    • 2.2.4 Resources
  • 2.3 Controllable factors
  • 2.4 The strategic marketing management process
    • 2.4.1 Planning
    • 2.4.2 Implementation and control
    • 2.4.3 Marketing plan
  • 2.5 Types of marketing strategies
    • 2.5.1 Strategic considerations for services
  • 2.6 Summary

• 3. Marketing research and information systems

  • 3.1 Introduction
  • 3.2 The marketing information system (MIS)
  • 3.3 Marketing research
    • 3.3.1 Scope of research
  • 3.4 The marketing research process
    • 3.4.1 Step 1: defining the problem
    • 3.4.2 Step 2: analysing the situation
    • 3.4.3 Step 3: obtaining problem-specific data
    • 3.4.4 Step 4: interpreting the data
    • 3.4.5 Step 5: solving the problem
  • 3.5 Summary

• 4. Consumer and B2B buying behaviour

  • 4.1 Introduction
  • 4.2 Consumer buying behaviour
    • 4.2.1 Psychological influences
    • 4.2.2 Cultural and social influences
    • 4.2.3 The decision-making process
  • 4.3 B2B buying behaviour
    • 4.3.1 Business buying processes
    • 4.3.2 Main types of business markets
  • 4.4 The buying of services
  • 4.5 Summary

• 5. Segmenting markets, targeting and positioning

  • 5.1 Introduction
  • 5.2 Market segmentation
    • 5.2.1 Dimensions used to segment markets
  • 5.3 Target markets
  • 5.4 Market positioning
  • 5.5 Summary

• 6. Product planning and decisions

  • 6.1 Introduction
  • 6.2 Product concepts
    • 6.2.1 The total product concept
    • 6.2.2 Product classifications
    • 6.2.3 The service offering
  • 6.3 The product mix
  • 6.4 Branding
  • 6.5 Packaging
  • 6.6 Product life-cycle
  • 6.7 Product development
  • 6.8 Summary

• 7. Pricing considerations

  • 7.1 What is the 'price' of a product?
  • 7.2 Pricing environments
  • 7.3 Pricing objectives
  • 7.4 Pricing policies
    • 7.4.1 Discount and allowance policies
  • 7.5 Price setting
    • 7.5.1 Cost-oriented price setting
    • 7.5.2 Demand-oriented price setting
    • 7.5.3 The price setting process
  • 7.6 Summary

• 8. Marketing logistics networks

  • 8.1 Introduction
  • 8.2 Definition of distribution
  • 8.3 Channels of distribution
    • 8.3.1 Selecting channels
    • 8.3.2 Main Australian channels
    • 8.3.3 Distributing services
    • 8.3.4 Managing channels
  • 8.4 Managing distribution
  • 8.5 Distribution and ports
  • 8.6 Summary

• 9. Integrated marketing communications

  • 9.1 Communication with a purpose
  • 9.2 Marketing communication process
  • 9.3 The promotional mix
  • 9.4 Managing advertising
  • 9.5 Managing publicity and public relations
  • 9.6 Managing personal selling
  • 9.7 Managing sales promotion
  • 9.8 Summary

• 10. E-commerce and direct marketing

  • 10.1 Introduction
  • 10.2 Direct marketing
  • 10.3 Electronic commerce
    • 10.3.1 Successful e-commerce
  • 10.4 Online marketing
  • 10.5 Using customer databases
  • 10.6 Privacy issues
  • 10.7 Summary

• 11. Managing the service encounter

  • 11.1 Introduction
  • 11.2 Participants
    • 11.2.1 Customers
    • 11.2.2 Service personnel
  • 11.3 Managing the service encounter
    • 11.3.1 Role theory
    • 11.3.2 Script theory
  • 11.4 Process
    • 11.4.1 Operations management and services
    • 11.4.2 Manufacturing efficiency
    • 11.4.3 Improving services efficiency
    • 11.4.4 Matching supply and demand
  • 11.5 Physical evidence
    • 11.5.1 Types of physical evidence
    • 11.5.2 Space demarcation
    • 11.5.3 Atmospherics
    • 11.5.4 Servicescapes
  • 11.6 Summary

• 12. Customer relationship management

  • 12.1 Introduction
  • 12.2 Customer relationship management
  • 12.3 Customer satisfaction
    • 12.3.1 Benefits of customer satisfaction
  • 12.4 Service quality
    • 12.4.1 Conceptual model of service quality
    • 12.4.2 SERVQUAL
  • 12.5 Summary

6.6 Product life-cycle

As we now understand what a product is, we are able to move on to the realisation that products do in fact have life-cycles with distinct stages. Somewhat like every person experiences a life-cycle between birth and death, so do products experience a life-cycle from introduction into the market to decline and withdrawal. You need to be aware of the characteristics of each stage, but, remember, the length of each stage varies from product to product, and from market to market.

The product life-cycle can be considered at two levels, at the industry level and at the level of individual products. Therefore there is a life-cycle for a product in general in an industry and life-cycles of the same products as marketed by different companies.

Besides the initial product development, your text indicates four stages in the product life-cycle:

• market introduction
• market growth
• market maturity
• sales decline.

Table 6.1 identifies typical characteristics of these different stages for you.

Consider this

Consider for example, the various types of cargo vessels that have been developed this century. Which of them are still in the growth stage and which are in maturity or decline?

Table 6.1 Summary of product life-cycle characteristics, objectives and strategies

	Introduction	Growth	Maturity	Decline
Characteristic Sales Costs Profits Customers Competitors	Low sales High cost per customer Negative Innovators Few	Rapidly rising sales Average cost per customer Rising profits Early adopters Growing number	Peak sales Low cost per customer High profits Middle majority Stable number beginning to decline	Declining sales Low cost per customer Declining profits Laggards Declining number
Marketing Objectives	Create product awareness and trial	Maximize market share	Maximize profit while defending market share	Reduce expenditure and milk the brand
Strategies Product	Offer a basic product	Offer product, extensions, service, warranty	Diversify brand and models	Phase out weak items
Price	Use cost-plus	Price to penetrate market	Price to match or best competitors	Cut price
Distribution	Build selective distribution	Build intensive distribution	Build more intensive distribution	Go selective: phase out unprofitable outlets
Advertising	Build product awareness among early adopters and dealers	Build awareness and interest in the mass market	Stress brand differences and benefits	Reduce to level needed to retain hard-core loyals
Sales Promotion	Use heavy sales promotion to entice trial	Reduce to take advantage of heavy consumer demand	Increase to encourage brand switching	Reduce to minimal level

Source: Kotler et al. (2004, p. 468)

The product life-cycle can also be presented graphically to help understand the four stages and the impact of sales over time. Figure 6.3 does this, starting with the traditional shape of the life-cycle in the graph in the top left-hand corner. The remaining graphs remind us that the product life-cycle varies a lot in terms of how long the life-cycle lasts and the shape it takes.

 

Figure 6.3 Different product life-cycle patterns
Source: based on Quester et al.(2004, p. 302)

Activity 6.5

Consider Figure 6.3 above

1. Write down brief descriptions of each of the product life-cycles as represented by each of the graphs.
2. Provide an example of a product which you think represents each of these forms of the product life-cycle.

Turn now to the next reading to review what your texts have to say about the stages and length of product life-cycles.

In your text

Kotler et al. (2004) Chapter 12, pp. 460-469, 'Product life-cycle strategies'.

The diffusion of innovations or the adoption of new products is an interesting process in the life-cycle of a product. Innovations and new products mean, of course, that previous services or products become obsolete. Most people would agree that technological obsolescence is inevitable and beneficial, but planned obsolescence is a controversial area. Yet, even though we deplore style obsolescence, we tend to conform.

It seems, however, that for many years, ports in Australia resisted technological and management innovation. The ports, their management and unions have been, on the whole, laggards when it came to initiating or accepting change, and the country has paid a heavy price for that attitude.

Consider this

Why do you think Australians resisted this change in earlier decades and what price have they paid since doing so? Of the five categories of people ¾ what do you see yourself as in regard to personal consumer goods?

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