The three phases through which brands pass as they are introduced, grow, and then decline. The three stages of the brand life cycle are the introductory period, during which the brand is developed and is introduced to the market; the growth period, when the brand faces competition from other products of a similar nature; and, finally, the maturity period, in which the brand either extends to other products or its image is constantly updated. Without careful brand management, the maturity period can lead to decline and result in the brand being withdrawn. Similar stages can be observed in the product life cycle. Brand Life Cycle and Strategy
Generally speaking, every brand or product has its life cycle which spans from the time it is launched to the time it exits from the market. This cycle covers five stages, namely product development, introduction, growth, maturity and decline. The life cycle of each and every brand or product is different, and different advertising strategies should be adopted at different stages to suit the marketing targets and market environment in order to achieve the best marketing results.
Product Development -- This is the stage of design, production and research carried out by a company to ensure that its products can meet consumer needs through sufficient market survey. The company will also improve its products in the light of market response and gradually build up its brand. Introduction -- During this stage, the product is introduced into the market and publicity campaigns are launched to promote its functions, features, quality and usage and attract customers to try out or buy the product. Growth -- The branded product begins to build up its following among consumers during this stage. The cumulative effect of marketing begins to show and the market share expands. However, the company must further step up its advertising efforts, and the advertising must highlight the characteristics and value of the product. Maturity -- Brands or products in the maturity stage have a considerable market share and have reached their sales peak, with growth beginning to slow down. Brand influence at this stage is at its height and the kinds of marketing strategies to be adopted are many. Decline -- Brand awareness is high but sales are on the decline. Other characteristics of this stage include falling prices, weakening competitiveness and emergence of new products. The same product or the same company may experience different life cycles in different markets. Sa Sa Cosmetics is a case in point. The company is a household name in Hong Kong which has already reached the stage of maturity. However, it has only started venturing into the mainland in recent years and is now at the stage of introduction or growth there. Sa Sa adopts different strategies to achieve its targets at different stages. In Hong Kong, its target is to increase its market share. On the mainland, it aims to draw the attention of consumers and increase its reputation. Some brands or products may experience exponential growth in their life cycle. When China began its reform and opening up in the early 1980s, mainlanders who came into contact with the new technologies and new products of foreign countries for the first time found them amazing. These products saw rapid growth and penetrated the mainland market within a short time, experiencing only the introduction and maturity stages in their life cycle. Examples of Exponential Growth
Mobile phones were rare commodities on the mainland in the early 1990s, but by August 2001, China had overtaken the US as the world leader with 100 million mobile phones. Home PCs also witnessed exponential growth. In 1994, there were only 400,000 PCs in China. The number soared to 10 million within a short span of eight years. Source:Synovate Ltd
SMEs must have a good understanding of the positioning of their brand and product category before they can effectively formulate...