Marketing Planning and Strategy

Growth Stage

The Growth stage is characterized by product sales increasing often at a very rapid rate. This is seen by large percentage sales increases over previous periods (e.g., 50% increase in sales from one quarter to the next). This is an indication the product has advanced beyond Early Adopters and is now being purchased by the mass market (i.e., Early Majority).

It is also the stage when early entrants begin to realize profits, though the fact the market is now profitable invariably leads to increased competition. It is also the time in which competitors try to actively position their brand in a way that will separate it from the onslaught of new entrants. For many products the Growth stage is represented by three distinct sub-stages: early, middle and late.

Early Growth Stage

Characteristics:

• Competition: Only a few competitors may be in the market as others wait to see whether the mass market will adopt the product. However, competitors selling products customers previously purchased to satisfy needs now addressed by the new product form may be getting very aggressive in their marketing tactics as they sense the new product form to be a threat.
• Target Market: Continued focus is on Early Adopters but marketers begin to identify new market segments that contain the Early Majority.
• Product: A basic product sold to the Early Adopters remains, but plans are underway to introduce products with different configurations, such as more options (e.g., advanced models) and fewer options (i.e., stripped down model). An expanded product line may be necessary to satisfy many different potential segments of the mass market.
• Prices: The average selling price may remain high especially in cases where market demand is strong and only a few competitors have entered.
• Promotion: Promotions are broadened with more emphasis on mass promotions and sales promotions that encourage product trial. Also, personal selling and sales promotions to distributors continue as marketers attempt to make inroads into distributors that target the mass market.
• Distribution: Marketers look for new distribution channels that enable the product to begin to reach the mass market. For instance, consumer products may look to gain distribution in large discount retailers.
• Profits: The early market entrants may begin to experience profits as early development costs have been covered and overall demand is gaining steam.

Brand Strategy:

In the early part of the Growth stage marketers are looking to expand the market beyond the Early Adopters and into the mass market using Market Expansion strategies such as: 1) Grow Sales with Existing Products primarily by getting new market segments to buy, and 2) Grow Sales with New Products by introducing new models containing different sets of features. The latter strategy is used not only to appeal to new customers but also to encourage repeat purchasing by existing customers.

Additionally, greater emphasis is placed on using promotion to continue building awareness and driving interest in the product form. This is due to: 1) the need to reach a broader market, and 2) to maintain an effective “share of voice” (i.e., percentage of all promotions in the market) so the marketer’s message is not lost among competitors’ increased promotional spending.