Rebranding and Product Life Cycle
This goes back to my previous post 'Rebranding – Let’s Google It'. I have gone around explaining people why I took such a stand. (This proves my point of our loyalty and being undemanding.)
Many asked me why we should try to make a change when already things are going good and fine. Should we change the winning strategy that has proved to be such a big money spinner? To answer this I have a simple explanation: Either we can wait for the competition to catch up and then react, or realize the time and deliver something which keeps us ahead of the competition, and let others always play a catch-up. Now this stand is good for any product in any market condition, and surely Google is no exception.
This time I want to be more generic in my views rather being specific to one product. I have a theory which is MY explanation to the product life cycle.
Every product has to go through a life cycle, from the time it was launched. The time frames can be divided into three parts:
1. Short Term
2. Medium Term
3. Long Term
This time frame changes from product to product, market to market. Like in the field of electronics and technology the whole life cycle may last a years or half more, in case of consumer and daily utility goods it may be a couple of years.
Lets look at each stage and analyze it.
Short Term:
When a product is launched and marketed, it gains acceptability and thus user base increases from 0 to a certain market percent. This growth usually is fast and exponential. As the market base increases it brings in revenue which can be used further to increase the market hold, tap untouched markets and advertise more. All this while customer base is increasing at a very fast pace. At this time focus is more on growth and marketing.
Medium Term:
Product is in the market from sometime and has tapped some market share. At this stage customer base stabilizes. Many become loyal customers and many new customers are added. Many leave the product also. At this time revenue is still being generated in positive direction, but the growth that was seen at an earlier phase is not there. Many competitors also enter in the market and try to pull customers. At this point focuses is more on retaining the customer and expand also. Different policies of price reduction or gift schemes are brought in to maintain the hype.
Long Term:
Now the particular product has been in the market for a considerable period, it has been able to retain loyal customer, competition has increased and many of the customers have shifted to a different product, market condition and people taste has also changed. Since customer base is diminishing, revenue also comes down. Focus is on price cutting and advertisement to pull in more customers. This put more pressure on the net revenues.
This is the time when usually product goes for rebranding or EOL.
Question is what do we want the destiny of our product to be? If we are looking at it as one of the biggest revenue spinner for the company then surely the enhancement and rebranding has to be thought at the medium stage and comes into effect before we say the product enters the last stage. This is important to remain ahead of competition and sustain the market share.
What other benefits we can have from it?
We can also look at increasing the customer base as the product has gone for a face lift; the right marketing strategy recreates the hype. Many of the customers who may have shifted will come back. New customer will also be added. This in tern will have an effect on the revenue. Competitors may have to re-pace themselves to do a catch-up again, and the product can enjoy high market share for some more time.
Time and again this theory has proved successful to many. Apple i-pod nano is one of the biggest example of it. 'i-pod' mini was taken out of the market to introduce 'nano' which recreated the hype to such an extant that, people who already had i-pods went on to buy nano for the sake of it. This is clever marketing strategy and surely is bold and daring. Everyone knows how it has turned the fortune of Apple and its competitors.
If we take example of Nokia and Sony in mobile phone market, almost every month we have a new product being launched. Many a times the phone has just one new feature added, but is released with a different name, to recreate the hype. Off course no one is complaining but that’s what happens when the customers are demanding, more choices and better product.
All this while writing this entry, 4 lines from Roger Waters kept coming into my head. Thought they are worth mentioning:
"By the grace of God Almighty
and pressure of the market place
the human race
has civilized itself
ITS A MIRACLE"
Many asked me why we should try to make a change when already things are going good and fine. Should we change the winning strategy that has proved to be such a big money spinner? To answer this I have a simple explanation: Either we can wait for the competition to catch up and then react, or realize the time and deliver something which keeps us ahead of the competition, and let others always play a catch-up. Now this stand is good for any product in any market condition, and surely Google is no exception.
This time I want to be more generic in my views rather being specific to one product. I have a theory which is MY explanation to the product life cycle.
Every product has to go through a life cycle, from the time it was launched. The time frames can be divided into three parts:
1. Short Term
2. Medium Term
3. Long Term
This time frame changes from product to product, market to market. Like in the field of electronics and technology the whole life cycle may last a years or half more, in case of consumer and daily utility goods it may be a couple of years.
Lets look at each stage and analyze it.
Short Term:
When a product is launched and marketed, it gains acceptability and thus user base increases from 0 to a certain market percent. This growth usually is fast and exponential. As the market base increases it brings in revenue which can be used further to increase the market hold, tap untouched markets and advertise more. All this while customer base is increasing at a very fast pace. At this time focus is more on growth and marketing.
Medium Term:
Product is in the market from sometime and has tapped some market share. At this stage customer base stabilizes. Many become loyal customers and many new customers are added. Many leave the product also. At this time revenue is still being generated in positive direction, but the growth that was seen at an earlier phase is not there. Many competitors also enter in the market and try to pull customers. At this point focuses is more on retaining the customer and expand also. Different policies of price reduction or gift schemes are brought in to maintain the hype.
Long Term:
Now the particular product has been in the market for a considerable period, it has been able to retain loyal customer, competition has increased and many of the customers have shifted to a different product, market condition and people taste has also changed. Since customer base is diminishing, revenue also comes down. Focus is on price cutting and advertisement to pull in more customers. This put more pressure on the net revenues.
This is the time when usually product goes for rebranding or EOL.
Question is what do we want the destiny of our product to be? If we are looking at it as one of the biggest revenue spinner for the company then surely the enhancement and rebranding has to be thought at the medium stage and comes into effect before we say the product enters the last stage. This is important to remain ahead of competition and sustain the market share.
What other benefits we can have from it?
We can also look at increasing the customer base as the product has gone for a face lift; the right marketing strategy recreates the hype. Many of the customers who may have shifted will come back. New customer will also be added. This in tern will have an effect on the revenue. Competitors may have to re-pace themselves to do a catch-up again, and the product can enjoy high market share for some more time.
Time and again this theory has proved successful to many. Apple i-pod nano is one of the biggest example of it. 'i-pod' mini was taken out of the market to introduce 'nano' which recreated the hype to such an extant that, people who already had i-pods went on to buy nano for the sake of it. This is clever marketing strategy and surely is bold and daring. Everyone knows how it has turned the fortune of Apple and its competitors.
If we take example of Nokia and Sony in mobile phone market, almost every month we have a new product being launched. Many a times the phone has just one new feature added, but is released with a different name, to recreate the hype. Off course no one is complaining but that’s what happens when the customers are demanding, more choices and better product.
All this while writing this entry, 4 lines from Roger Waters kept coming into my head. Thought they are worth mentioning:
"By the grace of God Almighty
and pressure of the market place
the human race
has civilized itself
ITS A MIRACLE"
Labels: Tech
posted by Yogesh at
5:50 AM
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