Strongpreneur#Business Growth Strategies
February 25, 2019 410
Strongpreneur#Business Growth Strategies
February 25, 2019 410
This article introduces entrepreneurs to the concept involved in developing a new product, the product life cycle, how to manage the product life cycle, product branding, packaging and other image-building features of a product.
A product can be defined, therefore, like something an organization markets that will satisfy a personal want or fill a business or commercial need.
It may be tangible, bought or not bought, inexpensive or expensive, essential or non-essential to human life, simple or complex, perishable or durable. It may satisfy physical needs, such as clothing, or purely psychological desires, such as make-up.
We need to note here that an entrepreneur must know the importance of the product (which is a very important element of the marketing mix). All the other three elements (price, promotion, and distribution) are about how to sell the product and get it to the consumer.
The entrepreneur has to be able to understand the needs of the consumers to be able to design and make products that can satisfy these needs.
The definition of a product can be expanded to include actual product and all the outlying factors that contribute to a consumer’s satisfaction.
All these things are part of the “product”. A product may be in the form of goods, services or ideas.
Products are dynamic. Like people, they are born, grow, mature, and eventually decline. On new products, “to be a real success, a product should be both better and different – a lot better and a little different.” To coming up with a winning product requires both research and creativity.
The product development process involves analysis of the market place, the buyer, the company’s capabilities, and the economic potential of new product ideas. To accelerate the process, many companies create multidisciplinary teams so that manufacturing and marketing plans can be developed in tandem while the product is being designed.
The product development that gives rise to the product life cycle are categorized into six stages:
The first step is to come up with ideas that will satisfy unmet needs. The entrepreneur may get new product ideas from his employees, his customers, his consultants, his competitors, through publications, associated companies, market research, research, and developments, etc. It is recommended here that the entrepreneur should always encourage his employees to assist him in generating new ideas. For every one product development to be achieved many ideas are generated.
At this stage, the various ideas generated are sieved to narrow them down to a few good ideas. These ideas are properly screened with a high level of objectivity.
A few guidelines for the entrepreneur to follow in screening his various ideas are the high-cost ideas, impracticable ideas, lack of technology or high cost of technology, cultural and social responsibility involved.
A product idea that survives the screening stage is subjected to business analysis. At this point, the question is “can the company make enough money on the product to justify the investment?” To answer this question, companies need to forecast the probable sales of the product, assuming various pricing strategies.
Also, they estimate the costs associated with producing the product at various levels of production. Given these projections, the company calculates the potential cash flow and return on investment that will be achieved if the product is introduced.
The next step is generally to create and test a few samples, (prototypes) of the product, including the packaging. During this stage, the various elements of the marketing mix are put together. Then, the company evaluates the feasibility of large-scale production and specifies the resources required to bring the product to market. The specimen is subjected to proper criticisms to come out with a better-packaged product.
During the product-testing stage, a small group of consumers uses the product, usually in comparison tests with existing brands. If the results are good, the next step is test marketing, introducing the product in selected or segmented areas of the country and monitoring consumer reactions. This is expensive and time-consuming.
Both the technical aspect (features, size, quality, colors, etc) and market acceptance, as it relates to taste, brand, packaging, and price, are tested. Areas of objections and criticisms are noted and fine-tuned to meet the consumers’ desired needs and wants.
The final stage of development is commercialization – the large-scale production and distribution of those products that have survived the testing process. This phase requires the coordination of many activities manufacturing, packaging, distribution, pricing, and promotion. This is normally the last bus stop.
At this stage, the product is now born; this is a point where the product life cycle begins.
A product passes through the development stages and gets delivered to the market after the commercialization stage. The product life cycle just like every living thing that starts from the introduction stage, through growth, growing maturity, stable maturity, decaying maturity to the petrification stage.
There are some assumptions of the product life cycle, such as:
This is the beginning of the product. This is the stage where the entrepreneur must make a lot of commitment and expect little. A lot is normally plowed in here because the objective of the entrepreneur is to create awareness.
The entrepreneur should equally come up with different strategies to overcome problems like:
At the growth stage, the entrepreneur makes sales here with a reduced production cost. The competitors have started creeping in slowly. The marketing objective at this growth stage is to maximize profit as early as possible by making more money to stabilize.
The marketing strategies at this stage are:
At this stage, the sales growth rate starts to decline gradually.
At this stage, sales flatten, because of market saturation. Normally, the product is at peak sales here. Competitors at this stage will be very many and there will be a lot of fake products and proliferation. The marketing objectives should be to maximize profit while defending the share of the market.
To maximize profit at this stage, the entrepreneur has to consider the followings:
The sales and products are declining at this stage. Customers here are the masses. Competition is equally declining here because acceptability is now low because of declining performance. The marketing objective at this stage is to reduce expenditure and milk the brand (i.e., exhaust the product).
At this stage, the entrepreneur should apply these strategies below:
At this stage, the product line is closed and the brand manager is either sacked or redeployed to another section. The entrepreneur can use some marketing strategies to revive the product through a different entry method of packaging and branding.
Regardless of what type of product a company sells, it may want to create a brand identity by using a unique name or design that sets the product apart from those offered by competitors. These features help the consumers to immediately recognize one product from another.
The entrepreneur can build the image of his products, namely:
A brand is a name or symbol used to identify a product. The American Marketing Association (1960) defines branding as a name, term, symbol or design, or a combination of them which is intended to identify the goods or services of the seller or group of sellers and to differentiate them from those of competitors.
Brands are a significant factor in marketing since they create a product’s image. Some popular brands enjoy great support among customers.
Good brand names are usually short, easy to pronounce, easy to remember, and easy to recognize. They should not include words that are in general use, such as radio, TV. These are generic words and no good company can claim an exclusive right to their use.
On the other hand, if a group of products becomes generally known by a brand name, that brand becomes a generic term and the manufacturer no longer has the exclusive right to its use. This is what happened to such former brand names as nylon and aspirin.
Usually, there are two kinds of brands namely manufacturers, or producers brand, commonly referred to as “national brands” and middlemen brands, usually termed “private brands.”
The followings are examples of well-known brands names Nescafe, coffee, Pepsi, Coke, Lipton tea, kettle tea, Maggi cube, etc. Some manufacturers and middlemen use individual brands only. Others prefer family or blanket brands, and others use both.
Companies take various approaches to building brands. The traditional approach is to create a different identity for each product a company sells so that if a problem develops with that product, the other items in the line will not suffer. This approach has the added advantage of allowing a company to create different product images for various market segments. Take, for example, Toyota Company with its varied products aimed at different types of buyers. The person who likes a Toyota Carina and the person who wants a “Toyota Camry are looking for completely different things, even though both want a Toyota car.
The entrepreneur has to think carefully about the benefits before spending millions of naira on a huge promotion campaign as the cost may drive up the price of the product. It is not a guarantee that consumers will buy a product just because they recognize the brand name.
Before deciding to build a brand entrepreneurs need to evaluate whether the payoff will be worth the investment. Often the answer depends on the type of product. People are loyal to some types of branded products than others.
Mundane product designed to handle tedious chores is less likely to inspire loyalty than products associated with an individual’s image.
There are three levels of brand loyalty:
One of the most intriguing examples of brand loyalty occurred in the mid-1980s when the Coco-cola Company attempted to discontinue traditional coke and replace it with a new formula. Although a $4 million taste test of 200,000 consumers had demonstrated that people preferred the new flavor, the company was overwhelmed with protests when it made the switch.
People were angry that anyone would tamper with coke, which had become an American institution in its 99 years.
Within months, the company admitted that it had goofed and brought back the old formula, calling it Coca-Cola classic and selling it alongside the new coke (Fisher, 1985). As it turned out, the incident worked to coke’s advantage. With two main products, it now commands almost twice the shelf space in supermarkets that it used to.
In a recent survey, it was discovered that some types of products inspire more brand loyalty than others because consumers are always unwilling to switch brands of products that they associated with their self-image even when they were offered alternative brands at half-price.
Effective packaging not only protects products from damage and tampering but also promotes the product’s benefits through shape, composition, and design. The packaging is the general group of activities in product planning which involve, designing and producing the container or wrapper for a product.
Packages serve the following purposes:
Labeling is an integral part of the packaging. Whether the label is a separate element attached to the package or a private part of the container, it serves to identify a brand.
Sometimes the label also gives grading information about the product or information about ingredients, operating procedures, shelf, or risks. Fair packaging mandates that every label must carry the product name as well as the name and address of the manufacturer or distributor and must noticeably show the net quantity.
Another way to build an image of a product is through good and unique designs. Good designs always help the consumers to differentiate one product from those of competitors. Many consumers describe a product with a particular design when searching for it or sending somebody to buy it.
Good designs also help the producers to upgrade product quality and durability. Above all, good designs can be used to improve product appearance and thereby improve the product’s marketability. Many products dominate their counterparts on the shelf usually because of the attractive and mature designs they have. An entrepreneur is therefore advised to always pay attention to the designs of their products because there lays a difference.
The color combinations and separations on a particular product determine how fast or slow the product will sell.
Color is very important as an image builder because the attractiveness or dullness of a product’s appearance is hinged on color. In the women’s world, colors play a vital role in their choice of a product, especially clothes.
The entrepreneur should take color combinations and separations serious either in the fashion industry or in the manufacturing industry as it helps to make a difference in the volume of sales and profitability.
Quality is one of the most important of the entire image building features of a product. A bad product will not attract repeat buys no matter how attractive the packaging may be. On the other hand, a good quality product may attract a repeat purchase from those who go for quality, not for packaging. Above all, a product that combines good quality with good packaging will always excel.
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