Refresh: Brand Life-Cycle
All product categories have a specific life span called the product life cycle. The product life cycle can pertain to unnamed products as well as those associated with a specific brand name. Many factors, such as competition and technology, affect brands and their product life cycle. Nevertheless, brands or products typically go through five stages of growth: (1) development, (2) introduction, (3) growth, (4) maturity and (5) decline.
The development stage is where the product concept is conceived, developed, branded and even tested before being introduced to the market. A lot of capital typically goes into the development stage, including product and advertising costs. It is certainly conceivable that a poor concept idea or the lack of capital could end the life of a brand before it is introduced.
During the introduction stage, companies heavily advertise their brands and products. Pre-leasing strategy is typically implemented here. Maybe it’s executing a local trade shows, using online and offline billboards, or banner ads for your new community. The advertising is mainly focused on building brand awareness. Companies usually price their brands relatively high during the introduction stage to recoup some of their development costs. Competition is low or non-existent during this stage.
Brands enter the growth stage of the product life cycle when sales start growing exponentially. Community managers are the day to day brand managers. Your brand may increase distribution during the growth stage to further enhance sales. A company may also improve the quality of their product brands, adding various features. Because of the success of one or more companies, more competitors will enter the market with their own brands. Consequently, some competitors may try to lower prices to gain marketing share.
Because of increased competition, a company’s brand will eventually reach the maturity stage of the product life cycle. During this stage, competition for market share may be fierce. A flood of new community versus old community is apparent. When the housing marketing is flush, new competitors will often have trouble successfully entering the market as market potential is limited. A company will often need to differentiate the brand of products toward a specific segment. For example, the company that first entered the market may focus on being the quality leader. The company may keep prices relatively higher to maintain its premium image. The target market may include older users with a higher household income.
The decline stage is where sales start to fall for a company’s product brands. At this point, it is still possible to extend the life of the product by finding new markets for the brand – such as new cities or perhaps international development. It’s very common to see apartment communities buy and sell, change names and refresh every 5-8 years. Retail or product examples might be a small detergent manufacturer may extend the life of the brand by selling to emerging markets, such as India. The company could also potentially extend the life of the brand by marketing the detergent in car washes, hotels, schools and even hospitals. Ultimately, a brand may need to be sold or gradually discontinued if it is no longer profitable.