CRITICISM

Growing and A Mature Product Market

Product Market

Different Market products at different phase have different affect on the company's cost. Reason that the product at growing stage focuses more on defining its position in the segment, and focuses more on penetration in the market by using different marketing tool. Using such tools raises the product cost which overall results in the increase of product price. On the other hand, when a product enters into the maturity stage, the chance of increasing growth also stabilizes. This stage helps the company in saving the more cost. This also helps in raising the profit margin for that product.

Characteristics of a Growing Product Market

If a product category satisfies the market and survive the introduction stage, entering the second stage of product life cycle is known as the growth stage, in which sales begin to increase rapidly.

This stage usually presents the following scenario:

•Sales rise rapidly.

•Many competitors entering the market.

•Products with new features appear (product extensions, service or warranty).

•Prices gradually decline as an effort by companies to increase sales and market share.

•The promotion is intended to persuade to achieve brand preference.

•The distribution shifts from intensive selective.

•Profits increase, as unit manufacturing costs fall and promotion costs are spread across a larger volume.

•Customers who purchase the product at this stage are early adopters.

According to Lamb, Hair and McDaniel, the sales growth phase tend to increase with rising rates, many competitors entering the market, large companies can begin to acquire small business pioneers and profits are healthy (Lamb, Hair & McDaniel, 2008:339-341).

Characteristics of a Mature Product Market

It is in this third stage of product life cycle, sales growth is reduced and / or stops. The characteristics that distinguish this stage are:

•In a first stage, sales are still increasing but at a decreasing rate, until the time comes when it stops.

•Competition is intense, although the number of competitors tends to stabilize first and then begins to decrease.

•The product lines are extended to attract additional market segments. The service plays an important role in attracting and retaining customers.

•There is intense price competition.

•There is a strong promotion (which aims to persuade) which aims to highlight the differences and benefits of the brand.

•Distribution activities are even more intensive than in the growth stage.

•The profits of producers and intermediaries decay mainly by intense price competition.

•Customers who buy at this stage are most media (Lamb, Hair & McDaniel, 2008:339-341).

Different Product Market Phases Affect A Company's Cost Recovery

Cost recovery varies with the variation of stages in the product market. Companies lying in growing phase have more cost and enjoying lower profits, while companies in mature market enjoys larger profit margin and more easily recover the cost. The cost recovery analysis is based on Life cycle analysis, also known as life cycle assessment, is the examination of the impact of a service or product in different phases. It involves measuring all resources, including both energy and raw ...