- Competition: More competitors are attracted to the market as they see the potential for high profits. Competitors selling products customers previously purchased to satisfy needs now addressed by the new product form may be extremely aggressive (may be entering the Maturity stage of their product form’s PLC) resulting in substantial price reductions. This may delay the adoption of the new product form by some Early Majority.
- Target Market: The Early Majority sector of the mass market begins to purchase in higher volume and, depending on the product, existing customers (i.e., Early Adopters) may be purchasing again. Those in the Late Majority are beginning to become customers.
- Product: Companies increase the number of product offerings in order to differentiate themselves from competitors. In most cases, new product offerings do improve on the performance or benefits offered by earlier products. However, the target market may begin to feel burdened by too many choices.
- Prices: As more competitors enter with more product options, prices may begin to fall, though the effect may not be felt as strongly if demand remains high. Pricing may be somewhat more competitive if large companies with strong financial backing are now entering, or in smaller segments, where multiple companies are trying to establish a niche.
- Promotion: Emphasis has shifted away from building awareness of the general product form to heavy advertising and sales promotions centered on promoting individual brands. Heavy selling and sales promotion continues with distributors.
- Distribution: Distribution reaches saturated levels as all possible channels are now handling the product.
- Profits: Marketers, who were early entrants to the market, may begin to see very high profits as demand is increasing while the pricing levels remain fairly strong. Depending on the product, unit cost of production may be dropping as manufacturing levels increase.
In the middle part of Growth stage, the objective is to continue a Market Expansion strategy, including seeking out new market segments that have not been targeted. This stage is also a time to focus on product positioning. The idea is to use marketing decisions to affect customer’s perceptions of a brand by trying to either: 1) separate a brand from other products (i.e., differentiate); or 2) bring a brand closer to competitor’s offerings (i.e., equivalency). For the product differentiation approach, marketers use promotional methods that show why their brand is different, while the product equivalency approach suggests how the brand is equal to other brands but offers notable advantages, such as lower price.
Late-to-market competitors may use a penetration pricing approach to establish a position in the market. Penetration pricing intentionally sets a price that is below long-term pricing in order to capture large share of market. The firm will raise price once the product is established.
Finally, some marketers also determine that it is time to focus on specific segments of the market via a niche marketing strategy approach.