What is Growth Stage?
The growth stage of the product life cycle (PLC) is when customers start to know about the marketer’s products, start making purchases, profits of marketer’s increases, and competitors also start to enter the market. In this second stage of PLC, the sales and profit of the company increase at an increasing rate.
Since mass and informative communication is done in the introduction stage, many prospects will come to know the products of the company. The products start to get a market for them. This leads to a rapid increase in sales as well as profit for the firm.
When the market of the products increases, there seems to increase in opportunities, that opportunities attract competitors to enter the market. Since sales of the firm are increasing at an increasing rate, at this stage, new competitors have not so adverse effect on the existing product.
In this stage, the basic goal of the marketer is to make an available range of product alternatives. As such, distribution outlets are increased, economies of scale are introduced, and price ranges are also introduced. Since the competition is increasing the promotion needs to be persuasive rather than informative.
Characteristics of Growth Stage
The common characteristics of the growth stage of the product life cycle are.
Sales and Profits Increase at an Increasing Rate
As in the introduction stage, the informative marketing is done, a huge amount is invested in promotional yet informative activities. In this stage, customers come to know about the products a marketer wants to marketize. As a result, the demand for the products increases continually. This increases the number of customers, so the sales and profits of the company go on the increasing.
Distribution and Product Line Increase
Since the firm starts to get more customers it focuses on increasing distribution outlets as much as possible. And, the product lines also need to be increased to meet the expectations and levels of different segments of the market.
Customers Prefer Mass Market
In this growth stage, customers do not satisfy with a single product. As customer numbers go on increasing, a single product can not meet all the expectations of the huge market. As a result, customers prefer the market where they get different products choices, different ranges of products prices, thus it seems necessary in this stage to expand product lines as fast as possible.
Competition is Increasing
The inevitable part of the growth stage is the rise of competition. As the success of the introduction stage, the market of the product goes on increasing rapidly. The number of customers, sales volume, and profits got increased.
This opens a way to enter the market for new people since opportunities also go on increasing. To get a certain sum of the opportunities competitors to begin to enter into the market, this led to an increase in competition, but in this stage, the competition remains at increasing and it reaches its peak at the next stage of PLC.
Promotion Becomes Persuasive
In this stage, the promotional strategy of the firm becomes persuasive. Since customers are known about the product, there is no need to be involved in informative activities. As the market and competition have increased to some extent only effective persuasive activities can push marketers’ sales and profits in this stage.
Growth Stage Strategies
The basic goal of the strategies applied in the growth stage is to increase the number of sales, profits, number of customers, and stand ahead of the competitors. Following strategies can be applied to make more successful the growth stage.
Product Strategy
In this stage, the possible marketing of the existing product is carried out. Since competition is increasing, the concept of the product line is assumed.
The marketer has to focus on availing different ranges of products that best fit all levels of the consumers such as their income, spending habits, and so forth. There needs to be a product mix strategy implemented successfully.
Price Strategy
In this growth stage, the price of the product is set low as compared to the introduction stage. As the competition has touched the market, there is the availability of different products with different ranges of prices.
This makes customers easy to shift from one marketer to another when they do not think the price is fair. Thus, a marketer should set ranges of prices that well meet customers’ demands and set fair prices for product lines appropriately.
Place Strategy
As we have discussed the growth stage’s characteristics, the number of customers is increasing, the competition is increasing. The marketer has to focus on expanding distribution portals. He should focus on establishing different distribution channels that ensure the effective and efficient distribution of products customers want.
Promotion Strategy
Here, informative promotion activities do not play well, the marketer has must focus on persuasive promotional and marketing actions. The cost of promotion is needed to be reduced more focusing on mass communication.
The customers need to be persuaded to do so the marketers want to. Since customers are well informed about the products. That does not make customers buy the products, some may buy on the spot but some don’t. Thus, it is the prime responsibility of the marketer to carefully influence customers towards his products and create a need for that products in customers’ minds.
Competitive Strategy
Competition in the growth stage is at an increasing pace. The marketer should have to focus on how to beat the competition which is stealing his customers. The marketer should focus on establishing a competitive position in the market that secures the future of his firm.
In addition, the marketer should carefully look at the strategies of the competitors, apply unique ways to attract more customers as far as possible, set prices near to the competitors, proactively reach out to the customers, and convince them how his products best fit their needs, and so forth to realize a competitive advantage and competitive position.