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What is Marketing

What is Marketing

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Published by: saeedqkj on Aug 01, 2009
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06/07/2012

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Cash Cow are products at the mature stage of the lifecycle, they generate high amounts of
cash for the company, but growth rate is slowing. There are chances that the product may
slip into decline, appropriate marketing mix strategies should be employed to try to
prevent this from happening.

Product Life cycle

The product life cycle concept suggests that a product passes through four stages of evolution.
Introduction, growth, maturity and decline. As a product evolves and passes through theses four
stages profit is affected, and different strategies have to be employed to ensure that the product is
a success within its market.

Product life cycle stages.

Introduction:

As a new product much time will be spent by the organisation to create awareness of it presence
amongst its target market. Profits are negative or low because of this reason.

Growth:

If consumer clearly feel that this product will benefit them in some ways and they accept it, the
organisation will see a period of rapid sales growth.

Maturity

Rapid sales growth cannot last forever. Sales slow down as the product sales reach peak as it
has been accepted by most buyers.

Decline.

Sales and profits start to decline, the organisation may try to change their pricing strategy to
stimulate growth, however the product will either have to be re-modified, or replaced within the
market.

Listen to a short lecture on product life cyclehere.

Michael Porters Generic Strategies

For an organisation to obtain a sustainable competitive advantage Michael Porter
suggested that they should follow either one of three generic strategies.

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