How can you most effective implement a Social Media strategy that focus on your product and service life cycle?
As part of your Social Media Marketing strategy you need to be aware of the product life cycle, and this strategy needs to reflect all of these stages.
Product life cycle refers to the stages a new product idea goes through from beginning to end. The life cycle concept does not predict how long a product category will remain in any one stage; rather, it is an analytical tool to help new Social Media marketers understand where their product is now, what may happen, and which strategies are normally appropriate.
The product life cycle unfolds across four distinct phases; Introduction, Growth, Maturity, and Decline.
A new idea is first introduced to the market. Promotion costs are high. Production cost is variable. Failure rates are high.
Your Social Media Marketing strategy must determine the marketing mix for your product;
Competitive Situation: If the product is new to the market you may either enjoy a monopoly or a competitive market that supply products that are slightly different from those supplied by your competitions.
Product Strategy: One or few. Frequent product modifications, as the product is refined for your market.
Place Strategy: Build channels – maybe selective distributions.
Promotion Strategy: Pioneering: Informing about product, not just your brand. Build primary demand.
Price strategy: Skimming (is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time) or pentration ( is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers).
Your sales are growing fast; profit raise. It is important to make the most of the growth stage, when profits are highest. Competitions enters, and may offer product variations to attract more customers.
Competitive Situation: Larger Social Media businesses may acquire a small pioneering Social Media Business. Heading towards competition involving numerous Social Media businesses that supply slightly different products, or in a market dominated by a small number of participants who are able to collectively exert control over supply and market prices.
Product Strategy: Variety: try find the best product, the build brand familiarity. At this stage all your developments cost has been recovered, and your sales volume has brought a positive ROI (Return Of Investments).
Place Strategy: Build channels; begin to move towards intensive Social Media marketing for higher distribution of your product.
Promotion Strategy: Information and persuading. Build demand.
Pricing Strategy: Meet the competition or engage in price dealing/price cut.
Sales level off, profits fall, and competition get tougher and more intense as businesses fight for smaller share of the pie. May result in price wars.
Competitive Situation: Similar to growth, but here some of the marginal competitors begin dropping out.
Product Situation: Similar products produces “battle of the brands”. Product revisions may emphasize style rather then function. Product lines are widened or extended.
Promotion Strategy: Frantically competitive environment places and emphasis on persuading and reminding.
Price Strategy: Meeting or undercutting the competition
This is caused by a long-run drop in sales. And new products are introduced to replace the old.
Competitive Situation: Marginal competitors drops out, and some competitors have dropped out for a larger Social Media business.
Product Strategy: Fewer products remain.
Promotion Strategy: Reduced promotion; focusing on reminders.
Price Strategy: Price cutting.
Relationship between the Products Life Cycle; Expected Competition; and Expected Profits
The product life cycle can vary in length. It’s often difficult for Social Media marketers to ascertain where a product is in its life cycle, how long the overall cycle will last, or how lone each phase will last.
The stages of the product life cycle can be mapped to a product curve that illustrate the relationship between the product life cycle and the number of competitors a successful product is likely to spawn over the length of that cycle.
Social Media marketers also identify a relationship between the product life cycle and the profits they expect to realize over the length of that cycle.
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