Is Your Product Past Its Expiry Date?
Yes indeed, your craft product does have a ‘best by’ date! Just like in the biology of life, craft products have a life cycle from the time they are created, to the time they lose their appeal.
For many craftpreneurs, missing this science can lead to frustration at continued low sales despite all the marketing efforts.
The product life cycle is perhaps the most important element when it comes to product design. It is what guides how and when to bring new products into the market.
“The goal of understanding your product’s life
cycle is to enable you to maximize on its value
and by extent its profitability.”
The product life cycle is divided into four:
1. Introduction
This is when the product enters the market. Revenue at this stage is low, although investment is heavy on distribution and promotion. As it is fairly common for most products to fail at this stage, you need a clear plan on how to enter and win in the market. Common entry strategies include penetration pricing, where you deliberately set low prices for rapid establishment and price skimming which involves setting relatively high price points to attract an exclusive target market.
2. Growth
This is the boom time for your product, and your goal should be to stay here as long as possible. At this stage, your product is relatively well known in the market and your sales have peaked. There is brand recognition and you begin to attract competition. As such, marketing campaigns must go beyond brand awareness, involving strategies that hinge on customer loyalty. You want to retain existing customers as well as attract new ones.
3. Maturity
Of the four, this stage stretches out the longest, sometimes for decades. It is a stage characterized by severe competition and declining profit margins.
As other players with cheaper and better products enter the market, focus should be on defending existing market share. This involves constantly looking for ways to remain relevant. The savvy designer will keep production costs to a minimum so as to maximize on profits, focus on product design and development and come up with new products to replace those on the decline.
4. Decline
This is technically the product’s ‘sell by’ date. At the decline stage, the product’s revenue trickles to a minimum and it is no longer financially viable. There is little interest from consumers and hardly any competition.
In the unlikely scenario that you have only one product, and that product is at the decline stage, you can see you would be in serious trouble. This stage can be likened to a product’s saturation point, and while there are many ways to recover from it, a more sustainable strategy would be to have several product lines. Keep a keen eye on where each is on the life cycle. The craft sector is arguably one of the most competitive and taking expired products to the market is a sure way to bury your business.Want to read more on the subject? http://www.mindtools.com/pages/article/newSTR_80.htm(Sources: The Open University- Money and Management, Wikipedia. Image mybizoflife.com)
In the unlikely scenario that you have only one product, and that product is at the decline stage, you can see you would be in serious trouble. This stage can be likened to a product’s saturation point, and while there are many ways to recover from it, a more sustainable strategy would be to have several product lines. Keep a keen eye on where each is on the life cycle. The craft sector is arguably one of the most competitive and taking expired products to the market is a sure way to bury your business.Want to read more on the subject? http://www.mindtools.com/pages/article/newSTR_80.htm(Sources: The Open University- Money and Management, Wikipedia. Image mybizoflife.com)
Christine Gitau.