Why does Facebook have to change its algorithm? Why does Apple keep announcing new iPhones every year? And how does Coca-Cola, with a flavor unchanged for 130 years (1886–2016), remain the world’s leading carbonated-drink brand?
According to basic marketing theory, once a product enters the market, it follows a life cycle with 4 stages: introduction, growth, maturity, and decline. In today's increasingly competitive business environment, every product will face the “decline” stage, when its sales and profits begin falling, possibly even sooner than expected.
Therefore, if managers and marketers do not want their brands or products to fade away like phone manufacturer Nokia or camera maker Kodak, they must have solutions ready to rescue their products from that danger. Drawing on the views Philip Kotler and Fernando Trías de Bes presented in Lateral Marketing, here are 5 simple ways entrepreneurs can solve this problem of “extinction”:
1. Change the Size
Coca-Cola offers different bottle sizes in every country where it operates. In Japan, as of 2012, traditional-flavored Coca-Cola in plastic bottles came in 10 sizes: 300ml, 350ml, 370ml, 500ml, 591ml, 600ml, 1,000ml, 1,250ml, 1,500ml, and 2,000ml.
For a product like Coca-Cola, where any change in flavor can spell disaster for the entire business—in 1985, Coca-Cola launched New Coke and suffered a major failure, losing much of its market share to Pepsi, leaving it with only 24%, and struggling to regain its current position—the safest way to “refresh” itself is to change product sizes and maintain a consistent marketing strategy for the brand.
Changing size allows a product to meet different consumer uses and satisfy new market segments. For example, large Coca-Cola bottles of 1,000ml–2,000ml serve families, meetings, and gatherings of relatives and friends, while smaller bottles of 300ml–500ml are mainly for individuals or couples.
2. Change the packaging
A packaging change once brought unimaginable success to Heinz ketchup. Founded in 1876, the company’s ketchup began struggling in 1987, after 111 years. Heinz found that the glass bottles it had always used were no longer popular, so it changed its packaging from glass to plastic.
However, by 2003, Heinz was “in danger” again. Following rigorous market research, in 7/2003 it launched a new ketchup bottle, the world's first upside-down, top-down bottle
Within just 12 months of introducing its new packaging, Heinz sold 7 million bottles of ketchup in the UK market alone, generating GBP 10.8 million. Today, Heinz is known as ‘the brand that defines the world's ketchup category.’
3. Carry out upgrades
The iPhone is one of many technology products that have successfully used this approach to extend their own “life cycle.” By changing the original structure and upgrading new product features to make them more functional, advanced and “technological,” Apple has helped the iPhone maintain its leading position over the past 9 years (2007-2016), regularly launching upgraded versions, from iPhone 3, iPhone 4, iPhone 5… to the upcoming iPhone 7, despite fierce competition from Samsung, Lenovo…
4. The “additional” component
Creating, upgrading, or developing secondary or complementary products alongside the main product is another way to keep a business’s products ‘healthy.’ Gillette’s razor is an example.
Throughout 114 years of development, Gillette's strategy has focused entirely on developing and upgrading… blades. It began with steel blades of a suitable thickness for shaving and progressed to today's completely safe triple-blade razors.
Gillette sells razors very cheaply and sometimes even gives them free to customers over 18, because its main profit and staying power come from complementary products.
5. Increasingly “spoil” customers
Reducing the effort customers need to obtain a product or service is also an effective way to sustain a product's “life cycle.”
Home delivery, online shopping instead of visiting stores, and online learning instead of attending classes… are innovations businesses create from customers' growing desire to be “lazy.” Expanding a business's operating area, bringing products to new markets, and opening up potential markets… are also common ways for businesses to “spoil” their customers.
