Principles of Marketing

Work Based Assignment

Andrew S Oloo Adm: NRB/52223

1. Characteristics of different stages of a product life cycle. The characteristics of a product life cycle can be summarized in a table as shown below:

Sales Introduction Growth Maturity Decline

Time

1. Sales 2. Costs 3. Profits 4. Consumer 5. Competitor

Low sales High costs per customer Negative Innovators Few

Characteristics Rapidly Increasing Sales Average cost per customer More profit Early Adopters More in number

Peak Sales Low cost per customer High Profit Early Majority & Late Majority Stable number beginning to decline

Declining Sales Low cost per customer Low profit Laggards Declining Numbers

Introduction Phase The Introduction stage is probably the most important stage in the PLC. This is the stage in which the product is initially promoted. Public awareness is very important to the success of a product. If people don't know about the product they won't go out and buy it. Growth Stage The Growth stage is where your product starts to grow. In this stage a very large amount of money is spent on advertising. If the advertising strategy used is successful, there will be an increase in sales, and the market share will stabilize. Maturity Stage The third stage in the Product Life Cycle is the maturity stage. If the product completes the introduction and Growth stages then it will then spend a great deal of time in the Maturity stage. During this stage sales grow at a very fast rate and then gradually begin to stabilize. Decline stage This is the stage in which sales of your product begin to fall. Either everyone that wants to has bought your product or new, more innovative products have been created that replace yours. Many companies decide to withdrawal their products from the market due to the downturn. The only way to increase sales during this period is to cut costs, reduce spending.

2. Marketing organizations that could be adopted to modern marketing organizations a) Line and staff organization: In most business forms especially medium size the marketing job is structured around few line functions and few staff functions i.e. Major staff functions is organized into separate department and the line function is responsible for sales department. The required coordination between the line and staff function is managed by the executive at higher level. Merits: Provides expert advice from specialists. Relives line executes of routine, specialize functions Enables young sales executive to acquire expertise Helps in achieving effective coordination Easy to operate Less Expensive Merits b) Functional Organization: Under the organization the departments are created on the basis of specified functions to be performed i.e. the activities related to marketing, distribution etc. Merits: Division of work base on specialization Relieves line executives of routine Specialized functions Promotes application of expert knowledge Helps to increase overall efficiency c) Product oriented marketing organization: Organizations that produce wide variety of products often organize marketing, trading and promotion with respect to a product. Merits: The salesmen can render better customer service as they possess good knowledge of product Sales men may have close contacts with customers. It makes individual departments responsible for the promotion of specific products. It facilitates effective coordination. d) Customer oriented marketing organization: When the departmentation of sales organization is done on customer basis it is called customer oriented marketing organization. Departmentation by customer may be done in enterprise engaged in providing specialized services to different classes of customers. Merits: It takes into account needs of each class of customers. It provides specialization among the enterprise staff e) Geography/ Territory: In a territory oriented marketing organization, the responsibilities for marketing of various products rests almost entirely with lines executives. The territory managers are given varying nomenclatures like depot manager, district manager, area manager, zonal manager, divisional manager etc. Merits: It leads to economy in terms of times and money It helps in taking knowledge of local customers It helps in effective control Merits