When a product is successful in the introductory stage of the product life cycle

During the introduction stage, companies spend most of their resources on product awareness and a customer base. The marketing team usually focuses on the four Ps of marketing:

• Product
• Price
• Place
• Promotion

‍

Product

Creating a marketing campaign starts with understanding the product and asking questions like who needs this product? And why? And what unique features does my product offer that the competitor doesn’t?

The marketer’s job is to define the product and highlight its features when they introduce it to the consumers. Next, they decide on the cost of the product, and how it will be distributed, and promoted.

‍

Pricing

In the introduction stage, the product price is either too high (skimming pricing strategy) or low (penetration pricing strategy). You can do product price testing to measure your target consumer’s willingness to pay for your product.

‍

Skimming Marketing Strategy

The skimming pricing strategy involves charging a relatively higher price for a brief period of time after launching a new or improved product. With this strategy, companies can capitalize on consumers who are willing to pay a higher price to be among the first to get their hands on the product.

A major advantage of using the skimming pricing strategy is that companies can recover the high development and other costs. After the initial launch, companies can lower the prices as the demand decreases.  

The downside of using a skimming pricing strategy in the introduction stage is that it may attract competitors. Other companies will take the high prices as a sign of high profit and a signal to jump into the market.

‍

Penetration Marketing Strategy

The penetration pricing strategy involves charging lower prices for a product in order to attract a larger consumer base. Keeping the prices low will also keep the competition at bay. This strategy usually results in a high sales volume helping you attain a large (if not dominant) market share. However, using a penetration pricing strategy requires a high invested capital, which is difficult in itself.

‍

Place (Distribution)

Product place or distribution is the consideration of where the product should be sold. The term also refers to advertising the product in the media to help gain maximum customer attention.

During the introduction stage, the product is usually placed in certain stores and displayed prominently to gain maximum attention from the consumers. The marketing team aims to put the product in front of consumers who will likely buy it.

Once the product passes through the introduction stage and enters growth, companies can make the product available in more places.

‍

Promotion

Marketing and promotion are important at every stage of the product life cycle. However, nothing can match the importance of product promotion and building product awareness in the introduction stage. To establish a strong brand, companies can also work with marketing or brand design agencies.

During the introduction stage, product promotion is focused on spreading awareness and educating the consumers about the product. If a company is launching a big product, then test marketing can be a great way to test the product before the actual launch.

Introductory promotions are a great way to encourage consumers to try your product. Once they give it a try, it’s only a matter of how good the product actually is.

‍

The introduction stage of a product's life cycle is the time to build awareness of your product or service in certain markets.

Introduction stage of product life cycle - objectives

During the introduction stage, you should concentrate on building a base for your product, and focus on the following marketing factors:

• pricing
• distribution
• promotion

Price your product or service

You should initially start pricing at the highest point you believe possible to achieve. You can also consider a skimming price strategy - charging a relatively high price for a short time when you launch a new, innovative or much-improved product. Skimming capitalises on customers who are willing to pay more to be one of the first to have a new product. You can lower the prices later when demand from the early adopters falls.

A penetration pricing strategy may work best for businesses entering a new market or building on a relatively small market share. It involves the setting of lower, rather than higher prices to achieve a large, if not dominant market share.

See how to price your product or service.

Distribution

Your distribution should be selective and limited to a specific type of consumer until your product is accepted. Also, you should consider different distribution models during different periods of the product life cycle, eg new products for different seasons in a clothes shop.

Promotion

You should try to build brand awareness at an early stage. It is worth working with a brand design or communications agency as you develop a product to establish a strong brand.

You can use samples or trial incentives to capture early adopters of the product or service. Introductory promotions can also help convince potential resellers to carry your lines. Different marketing strategies work better at different stages of the product's life cycle. Read more about the product life cycle strategies.

Product life cycle introduction: profitability

It is likely that, at the introduction stage, your sales will be low until customers become aware of your product or your service's benefits. Due to the high cost of advertising and low initial sales, it is possible that you won't make immediate profits or you may even find that the product is producing negative profits. However, you should make up for this with increasing revenue generated at the growth and maturity stage of a product life cycle.

What is the introductory stage in a product life cycle?

What strategy you will take if a product is at the introduction stage of product life cycle?

What are two characteristics of the introduction stage of the product life cycle?

What is one major task during the introduction stage of the product life cycle?