Transcript Consumer Demand & Product Life Cycle
The Consumer – Chap 2.1
What is the difference between a consumer and a customer?
Consumer Demand
Consumer —a person who uses a product (think of the word “consume” = use) Custome r—a person who purchases a product Gatekeeper themselves —a person who purchases a product for someone that is not able to do so
Consumer Demand
Needs —are essential to our survival Food Shelter Protection Affection from loved ones Affiliation (belonging)
Consumer Demand
Wants lives —are not necessary for survival but add pleasure and comfort to our Xbox 360 or PS3 7 Jeans BMW 750 or Audi R8 Louis Vuitton & Coach bags
Consumer Demand
Both customers and consumers have basic needs and wants In Canada & the USA,
consumer demand
is driven more often by
what we want rather than what we need
( hence the term “consumerism”)
The Product Life Cycle Chapter 2.2
The Product Life Cycle
This cycle describes the changes in consumer demand over time The product life cycle is based on the knowledge that no one product will be in demand forever
The Product Life Cycle
There are five stages cycle Introduction Stage Growth Stage Maturity Stage Decline Stage Decision Point Stage in the product life
The Product Life Cycle
The Product Life Cycle
Introduction Stage When a product is introduced in to a market known as a product launch The most expensive stage of the five stages Products are priced very high at this stage e.g. Apple iPhone 4 (16 GB) = $659 + HST
The Product Life Cycle
Introduction Stage Products are bought by early adopter or trendsetters e.g. students buying Apple iPhone 4, Halo Reach or Fifa Marketers use either a the new product push or pull strategy to sell Push Strategy—marketing efforts are focused on product placement in stores Pull Strategy—marketing efforts are focused on promotion techniques
The Product Life Cycle
Growth Stage The product is highly visible life or in the media in either daily Manufactures of the product will advertise heavily during this stage This is the stage where the product will catch on or fail
The Product Life Cycle
Growth Stage There is very little competition beginning of the stage at the As the number of competitors increase market share becomes important Market Share —the company’s sales of goods or services as a percentage of the total sales for that market
The Product Life Cycle
Growth Stage Factors that prevent competitors from making a profit are called barriers to entry Small market size The cost of R&D Advertising expenses Factory and equipment costs Lack of distribution channels Customers in this stage are the early majority
The Product Life Cycle
Maturity Stage Sales in this stage increase slowly, if at all Advertising during this stage highlights the fact that the product has lasted for a long time Manufactures have recouped the major costs associated with the introduction stage
The Product Life Cycle
Maturity Stage Businesses use income generated by mature products to develop and launch new products Customers in this stage are called the majority late
The Product Life Cycle
Decline Stage A decrease in profits The manufacturer is only able to find a few new customer Customers in this stage are called laggards
The Product Life Cycle
Decision Point Stage During this stage the company decides whether or not to continue manufacturing the product In order to continue product, new uses developed manufacturing a dying for the product must be