- Competition: By this stage, any company that was alone in launching the new product form is alone no longer, as it is highly likely at least one competitor has entered the market.
- Target Market: Marketers are now engaged heavily in getting a high percentage of Early Adopters to accept the product.
- Product: With competitors entering the market, choices available to customers expand, though the difference between competitors’ offerings is often not that significant.
- Prices: Product pricing remains high, though any new competitor entering at this stage may attempt to compete with the early entrants by offering a lower relative price.
- Promotion: The promotional message is still one designed to educate the market on the benefits of this new product form, yet with more competition there is a noticeable increase in the use of advertising that highlights a company’s brand. Also, personal selling and sales promotion have increased, especially for targeting the channel of distribution as entrants attempt to secure distributors.
- Distribution: The number of distributors continues to increase with many now offering products from several market entrants (which at this point may still be only a few).
- Profits: Losses continue to mount due to high marketing cost and the need to recover development expense. Losses may be even higher than anticipated if the market adopts slower than forecast or if more companies enter than expected.
Early entrants continue to create awareness and educate customers, but their promotional orientation may shift to a “buy-our-brand” approach if more companies enter the market. Thus, at this stage, marketers begin to position their products with the intention of separating themselves from the competition. In many ways, this stage is where the real competition begins and aggressive marketing tactics are likely to be the norm in the very near future. However, those selling in this market must understand, that because the mass market (i.e., Early Majority) has yet to purchase in large numbers, there is still a high level of uncertainty as to whether the product form will be successful. This is especially the situation with high-tech products (for more see Criticisms of PLC: Part 2).