Moral

Consumerism:

  • Consumer society:
    • Filled with brand new products that we are told we ‘need’ through advertising.
    • Vast range of products satisfying almost any want are readily available.
    • Products are designed for a mass market:
      • Thus there are multi-national companies selling and trading in global markets.

Mass Marketing:

  • Involves developing products with widespread appeal and promoting them to all types of consumers:
    • Ultimate aim is to develop a global name like Nike or Coca Cola.
  • But it relies on reducing costs and selling a large amount of products with a relatively small profit margin:
    • This requires companies to sell in many countries:
      • This needs heavy investment and lower manufacturing costs:
        • Thus causing globalisation (labour and overheads are considerable cheaper in developing countries than in developed countries):
          • Overheads are operating expenses like rent.
  • Different cultures:
    • Different cultures see things differently:
      • Snickers bars were originally called Marathon in the UK but Mars renamed it because it was known as Snickers in many nations such as the US.
      • Some names would cause offense to people in different cultures.

The Product Lifecycle:

  • This shows the sales of a product over time:

Product Lifecycle

  • Introduction (1st phase of the product lifecycle):
    • Initial launch of a new product to satisfy a potential need in the market.
    • Sales are low due to lack of reputation.
    • Prices are high due to the costs of product development.
      • Many products fail at this stage.
  • Growth(2nd phase of the product lifecycle):
    • Sales grow.
    • Characterized by a sustained rapid increase in sales.
  • Maturity(3rd phase of the product lifecycle):
    • Sales of a product levels out:
      • Little or no further increase.
    • Because of:
      • Market saturation (where the product has reached all parts of the market).
      • Potential need has been satisfied.
      • Etc.
  • Decline(4th phase of the product lifecycle):
    • Sales decrease below the level seen in maturity:
      • By this stage all initial investment costs for product development should have been more than covered.

Planned Product Obsolescence:

  • This is the so-called ‘fifth phase’ of the product lifecycle.
  • Due to constant changes in technology some products become obsolete (out of date) very quickly:
    • Companies know this but may still launch products that they know will have short lifespans.

Sales Methods:

  • During the 1960s and 1970s:
    • Some American car manufacturers made constant styling changes to their range and even built cars that would rust easily:
      • Thus people had to upgrade their cars more often than usual.
    • Another American company found out, with market research, that most people bought new potato peelers because they would accidentally throw their old one away with the potato peelings:
      • Thus they made a new peeler with a murky coloured brown handle to camouflage itself in potato peelings.
  • Nowadays:
    • PC companies constantly upgrade the specifications of their products:
      • This is so fast that whenever you buy a PC, there will almost always be a better one immediately.
    • Point-of-sale displays for shops:
      • A point-of-sale display is a special sales promotion that is found near, on, or next to a checkout counter (the point of sale):
        • Usually used to promote new products, special events or special offers, etc.
      • Made with materials that cannot stand wear and tear:
        • A company may only want the display to last for the duration of a marketing campaign or another such amount of time.
        • Then they will be sent back to the company’s warehouse for storage or be destroyed.

Changing Fashions:

  • As fashions change some products will become more popular, as a result other substitutes will become less popular:
    • This is especially the case in youth culture.
    • Manufacturers try to update or change the brand identity of the product in order to modernize it.

Acknowledgements:

Graph from http://commons.wikimedia.org/wiki/File:Ciclo_Producto.png with modifications

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