Classification of goods, Product life cycle concept...

Classification of goods

There is a wide variety of classifications of goods on various grounds, the main of which is the purpose of the application of the goods. For this reason, the products are divided into consumer (directly intended to meet the personal needs of people), strong> including for the continuation of the production of other goods (means of production).

For consumer products , there are two forms in marketing. The first is based on the nature of consumption and includes three categories:

o short-term goods, used once or several times (soap, matches, meat, newspapers, etc.)

o Durable goods, used repeatedly by the consumer (cars, refrigerators, clothes, shoes, etc.);

o services - actions that bring people useful results and satisfaction and are the object of trade (watch repair, tailoring, furniture transportation, hairdresser services, paid doctor services, teachers and others).

The second form of classification of consumer goods is based on the behavior of the consumer, his habits in consumption. It also distinguishes three categories of goods:

o goods of everyday demand, which we buy often without hesitation, and with minimal effort to compare them (matches, stationery, toothbrushes, household trivia );

o goods of careful choice, when buying, we compare their quality, price, external design with similar goods (clothes, shoes, electrical household goods, furniture, etc.) . The consumer makes certain efforts to search, choose, until he finds a suitable product for him;

o prestigious products, or possessing truly unique characteristics, either associated with the name of a well-known manufacturer, or defining the consumer's image (expensive cosmetics, fashionable clothes, shoes and t .).

Products for production , depending on their participation in the production process, are divided into raw materials, materials, semi-finished products, finished parts, etc., which are fully used in the production process final products. They do not turn into a final product and are not the object of sale.

Thus, the marketing approach to the goods requires an assessment of the market profitability of the options for the economic behavior of the enterprise, is based on careful consideration of the technological, raw materials, personnel, scientific and technical and other resources of the enterprise, the picture of consumer demand and the possibilities of promoting the goods to the market. If all this is taken into account when deciding on the production of goods, the enterprise can count on success.

Product Life Cycle Concept

Each product has its own life cycle (JTS) of presence in the market, a period of a certain market stability, and sooner or later it is forced out of the market by another, more perfect or cheap commodity.

For the organization of marketing activities, the nature and length of the product life cycle, the specifics of its stages, the peculiarities of the transition from one stage to another are of great importance, which has a significant impact on the sales volume and profit level of the enterprise.

Product life cycle - the period from the moment of its initial appearance on the market until the termination of its sale in this market. For the first time, the term life cycle was used in marketing by Theodor Levitt by 1965

Features of the product life cycle and its stages predetermine a differentiated approach to different combinations of individual marketing tools.

Each product life cycle has stages that represent the life of a product from its introduction into the market to its growth, maturity and withdrawal from the market (recession). In Fig. 4.16 represents the classical model of the LCT by F. Kotler.

Product life cycle model

Fig. 4.16. Product life cycle model

There are the following stages of the product life cycle:

o stage of introduction to the market;

o growth phase;

o stage of maturity (saturation);

o stage of decline (decline).

The implementation phase is preceded by the product development stage, including analysis of production capabilities, research and development, marketing research, pilot production and testing, trial sales. The enterprise invests in the technical and organizational preparation of production.

The stage of introduction to the market is characterized by excess and non-utilization of production capacities, since the goods are produced in small batches or in batches. The production is distinguished by a high cost, because the technology of production has not yet been fully developed.

Let's list the main marketing tasks at this stage:

o formation of an effective sales network, creation of new sales channels;

o active holding of informative advertising, which is designed to convey the advantages of the product;

o Determination of the most optimal time to enter the market with a new product

o overcoming the functional competition between the new and existing goods on the market;

o Development of options for possible behavior of competitors in response to the appearance of a new product on the market;

o ensuring that the existing consumption pattern of the new product is in line with the market;

o Providing technological and market adaptation of a new product on the market.

Marketing costs at this stage are very large.

Growth phase is characterized by a full load of production capacity due to the transition to large-scale serial or mass production.

There is a rapid increase in sales and increased competition. Prices continue to remain high, but their level is already somewhat lower than at the implementation stage. The enterprise starts to receive a stable profit, sharply increasing by the end of the stage to the maximum value. It is the beginning of profit making that marketers are associated with the transition to the stage of growth. The circle of buyers is expanding.

At this stage, the marketing tasks are as follows:

o avoid direct competition due to modifications and partial improvement of the product;

o Ensure the effectiveness of aggressive advertising of your product;

o use a large sales network for mass sales of goods;

o to ensure the highest possible price level, etc.

Maturity stage is associated with some excess production capacity and the use of stable waste technologies. The goods are produced in large quantities. The costs of deepening the range are high. In order to meet the demand of consumers, the enterprise produces a large number of modifications and product variants. There is a slow growth in sales' to the maximum. An undesirable competitive reduction of the chain is carried out. The market is increasing the number of brands for similar products. Because of increased competition, the chains for products start to decline, the profit - to decline.

Consider marketing tasks at the maturity stage:

o the deep segmentation of the market and the development of new markets;

o differentiation of the product range;

o competition of advertising campaigns;

o encouraging and stimulating more frequent consumption of goods by buyers;

o finding ways to more diversified use of the product;

o expanding the market by attracting new consumer groups;

o price reduction, etc.

The company strives for further improvement of the product and seeks new uses for it.

The Decline phase is associated with a significant excess of production capacity. There is a small differentiation of the goods. The quality of the goods is unstable. The volume of sales is falling. Enterprises start to get out of competition, the number of competitors is decreasing. The prices for the goods are low (although at the end of this stage they may increase). The profit is sharply reduced, and the goods are sold at a loss for the enterprise. The product is gradually being replaced with a new one.

At the final stage of the product life cycle, you can distinguish three periods:

o the enterprise can still try to extend the product life cycle through intensive advertising, product improvement, price policy maneuvering, etc.

o the company strives to squeeze the residual profit from the product (which is still real), attracts loyal consumers who continue to buy goods, drastically reduces the costs of production and marketing of goods, which allows to delay the withdrawal of goods from the market for a while;

o the enterprise plannedly and deliberately removes the goods from sale; a decisive removal from the market is subject to slowly turning around, non-moving goods.

The task of marketers is to use the product life cycle to increase the efficiency and profitability of the enterprise.

The success of the commodity policy as a whole provides the conceptualization of alternative products or competitive goods, i.e. identification of goods with which the enterprise's products will compete.

The concept of life cycle Applicable to all types, subspecies and brands of goods. Different goods have different life cycle activities and each stage: from several days to several tens of years.

The task of a marketer is to rationally extend the life of a product on the market, although the development of scientific and technological progress, on the contrary, leads to an accelerated "aging" goods, compression of the life cycle.

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