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