One of the key things to know about what you’re selling is where it’s at in the “Product Life Cycle.”
Every product or service – automobiles, computers, plumbing, baseball cards, marriage counseling – goes through a life cycle usually described as introduction, growth, maturity, decline.
The reason this is critical to know is marketing is VERY different at different stages.
For a brand new product – say, the Internet around 1993 – marketing is all about getting the word out. No one has ever heard of it, there is no demand or competition. Publicity is king in this phase, advertising is of little use.
During the growth phase, competition is jumping into the market. Marketing is huge in this phase, where the fight is for branding and market share. Establishing a new company in the arena is easy; all it takes is the bucks to advertise or a way to let people know you exist. Think websites around 1997. Nobody knew anything about it, just that they needed one. Anyone could call themselves a website designer and do well.
In the mature phase, brands are well established (or perhaps never established) but differentiation between existing brands is increasingly poor. More and more, consumers are either buying out of habit or purchasing on features, price, and convenience alone. In this stage, marketing for existing companies is important to retain your position. Establishing a new company requires either smart differentiation from competition, or is based on price and big budget advertising alone.
In the decline phase, the product is fully a commodity, meaning purchase is only on price, features and convenience, and the fight is over share in probably a declining size market. The ordinary desktop computer is in this stage. Marketing ROI is increasingly difficult as profit margins shrink. Revitalization of sales depends almost entirely on the development of a new sub-category or major innovation (“netbooks” for example).
Determining which stage your products or services are at is crucial. If you don’t, you’ll likely be missing the woods for the trees in strategizing your marketing.