Chapter 14  Product decisions   459

Exhibit 14.1
Salesforce.com as provider of CRM ‘cloud’ services

Salesforce.com was founded on the concept of deliv-
ering CRM applications via the internet, or ‘cloud’.
They introduced their first CRM solution in February
2000 and they have expanded their offerings with
new editions, solutions and enhanced features,
through internal development and acquisitions.
Their mission is to help customers transform
themselves into ‘customer companies’ by empower-
ing them to connect with their customers in entirely
new ways.
Salesforce.com derive their revenues primarily from
subscription fees (one year at a time) for their services.
In the financial year 2015, Salesforce.com achieved
US$10.5 billion in revenue. Approximately 30 per cent
Source: based on salesforce.com, financial report 2018 and other public sources.
of their revenue comes from customers outside of the
Americas (North and South America). On 1 February
2019, Salesforce.com had 30,000 employees.
Growing demand for cloud CRM software services
will facilitate the company’s revenue and market
share growth in coming years. However, Salesforce.
com operates in the CRM solutions market, which
is highly competitive, rapidly evolving and frag-
mented. The company primarily competes with ven-
dors of packaged business software and companies
offering CRM apps. Salesforce.com also faces com-
petition from internally developed applications. The
major direct competitors of the company include
Microsoft, Oracle, SAP and IBM.

14.4  The product life cycle

PLC
Product life cycle
concerns the life of a
product in the market
with respect to busi-
ness/commercial costs
and sales measures.
Simply explained, it is
a theory in which prod-
ucts or brands follow
a sequence of stages,
including introduction,
Copyright © 2019. Pearson Education Limited. All rights reserved.
The concept of the product life cycle (PLC) provides useful inputs into making product
decisions and formulating product strategies.
Products, like individuals, pass through a series of stages. Each stage is identified by its
sales performance and characterized by different levels of profitability, various degrees of
competition and distinctive marketing programmes. The four stages of the PLC are intro-
duction, growth, maturity and decline. The basic model of the PLC is shown in Figure 14.3,
where also the stages prior to the actual sales are included. In total these stages represent the
so-called time to market (TTM).
Time to market is the length of time it takes from a product being conceived until it

growth, maturity and
sales decline.
Time to market
The time it takes from
the conception of an
idea until it is available
for sale. TTM is import-
ant in those industries
where products become
quickly outmoded.
becomes available for sale. TTM is important in industries where products become outdated
quickly, for example in the IT industry.
Rapid TTM is important for the competitive success of many companies for the follow-
ing reasons:
• Competitive advantage of getting to market sooner
• Premium prices early in the life cycle
• Faster break-even on development investment and lower financial risk
• Greater overall profits and higher return on investment.
The key process requirements for rapid TTM are:
• Clear understanding of customer needs at the start of the project and stability in product
requirements or specifications
• A characterized, optimized product development process

Hollensen, S. (2019). Global marketing. ProQuest Ebook Central <a onclick=window.open('http://ebookcentral.proquest.com','_blank')

href='http://ebookcentral.proquest.com' target='_blank' style='cursor: pointer;'>http://ebookcentral.proquest.com</a>
Created from aston on 2020-11-28 02:59:47.