Bsc TTM_Sem-3_Tourism Marketing_Unit 7-Product Life Cycle

IDOL Institute of Distance and Online Learning ENHANCE YOUR QUALIFICATION, ADVANCE YOUR CAREER.

BTT 2MARKETING MANAGEMENT All right are reserved with CU-IDOL Tourism Marketing Course Code: BTT112 Semester: Third Unit: 7 www.cuidol.in

Tourism Marketing 33 COURSE OBJECTIVES COURSE OUTCOMES • The course aims to provide basic knowledge of different tourism products of India. • To Equip the student with the understanding of domestic destinations. • To enrich student with knowledge of diversified tourism resources and products www.cuidol.in Q 101) INSTITUTE OF DAISllTAriNgChEt aArNeDreOsNeLrvINeEdLwEiAthRNCIUN-GIDOL

Product Life Cycle 43 UNIT OBJECTIVES UNIT INTRODUCTION • After learning this lesson, the student will be able to . • Identify the concept of Product life cycle. • Explain the stages in product life cycle. • Analyse the marketing strategies in PLC • Define the marketing strategy in growth stage. www.cuidol.in Q 101) INSTITUTE OF DAISllTAriNgChEt aArNeDreOsNeLrvINeEdLwEiAthRNCIUN-GIDOL

Introduction 5 • A Product's Lifecycle (PLC) The word \"Product Life Cycle\" was coined by Theodore Levitt in 1965 in an article titled \"Exploit the Product Life Cycle\" that appeared in the Harvard Business Review on November 1, 1965. • Having a consistent and growing revenue stream from product sales is important for the stability and development of a company. • Consultants and managers may use the Product Life Cycle model to ascertain a product's or industry's maturity level. Knowing the level at which a product is at allows you to predict future market demand and decide the types of tactics that should be implemented. • The life cycle of a product is an analysis of its (sales) past. It details its launch, rapid acknowledgement, ascension to the pinnacle of its status, descent from the pinnacle, and eventual demise. • A product undergoes several phases over the course of its life. • The word PLC is important in both marketing theory and practise. • It's worth remembering that we will conduct a PLC analysis only when the product reaches the end of its useful life. www.cuidol.in All right are reserved with CU-IDOL

Product Life Cycle 6 • The Product Life Cycle is a stage-by-stage progression of a new product from introduction to development, maturity, and decline. • This definition is used by management and marketing professionals to determine when it is necessary to increase ads, decrease costs, extend into new markets, or redesign packaging. • Older products eventually lose popularity, while demand for new or modern products typically increases rapidly following their launch. • Given that the majority of companies are aware of the product life cycle stages and that the products they market have a limited lifetime, they invest heavily in new product creation to ensure that their organizations continue to grow. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 7 • Tourism destinations are by their very nature dynamic. • The destination is a place where goods are gathered. Destinations, like products, have a life. • The term \"Tourism Product life cycle\" is used to describe the evolution of a specific destination and the successive stages it undergoes over time. • In tourism and tourism-related industries, success requires an understanding of the entire process www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 8 www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 9 • Tourism product life cycle theory has the potential to be applied in the planning of tourist destinations. • This concept paints a clear image of the process of transition occurring within tourist destinations. • It offers a conceptual framework for forecasting the long term gap, allowing for the implementation of policies and strategies for sustainable land use, economic development, and marketing • Numerous models have been developed over time to investigate the evolution of destinations, but the majority are purely descriptive. • As a result of mass tourism's exposure, an increasing number of researchers have proposed evolutionary models in which the term reflects additional stages of destination growth, such as saturation and decline. • This adds to the assumption that all tourism destinations undergo some stage of growth. As a result, every type of tourist product must pass through many stages, collectively referred to as the tourism product life cycle. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 10 • The following stages of the product life cycle are discussed in terms of \"destination\" as a tourism product, as tourism cannot occur without a destination, which is one of the most important tourism products. • Exploration Stage • It is the initial stage in the life cycle of a tourism product. This stage involves the discovery and introduction of new tourism items. • A small number of visitors begin to arrive at the unspoiled venue. Typically, thrill seekers and nature lovers travel to uncharted destinations in search of new experiences and adventures. • Tourists seeking variety in their vacations can discover places that are unique due to their natural beauty, traditions, history, landscape, and culture. • At this time, no or restricted tourist services will be available. Due to a lack of understanding about tourism and its benefits, local residents are uninvolved in tourist revenue-generating activities. • There is a negligible social and economic effect due to the small number of visitors, inadequate facilities, and a lack of infrastructure built specifically for tourism purposes. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 11 • Involvement stage • This is the second stage in the life cycle of a tourism product. • At this point, the number of visitors begins to increase steadily, and the host community of the destination becomes aware of the increase in movement to their location/destination. • Additionally, these hosts become involved in tourism-related events. Local governments have also begun to engage in tourism- related programmes. • Local areas also begin establishing their own businesses to offer a variety of tourist-related amenities and facilities, including lodging, meals, tour guides, and transportation. • Participating in these tourist events also helps to boost the locals' quality of life and creates work opportunities. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 12 • Additionally, it assists the local population in earning money and achieving their goals and aspirations. Thus, tourist destinations begin to expand, and adequate infrastructure is constructed and expanded. • This stage initiates marketing, ads, and publicity. Since locals begin to participate in tourism activities, they gain knowledge about the various natural resources in their surroundings and also gain an appreciation for their culture and traditions. Via engagement activities, understanding of the importance of environmental conservation begins to grow. • Participation of the local community also contributes to the improvement of their basic needs such as hygienic food, health and medical services, and education. • Additionally, there is an increase in the number of people participating in various sports, and work prospects begin to grow or increase. • This increased involvement and employment opportunities contribute to the improvement of the destination's economic and social system. • This is the point at which locals begin to recognise business or start-up prospects, and the potential for development definitely increases. • Locals begin to market their culture and practises as tourist items as a result of their involvement. To increase the number of visitors, which tends to result in the development of USPs and an improvement in the destination's picture. ww•w.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 13 • Development Stage • The development stage is the third stage in the life cycle of a tourism product. • Where tourist arrivals are significantly higher than at the previous level. And it is at this stage that foreign investment begins to flow into the destination as a result of the establishment of a well- defined tourism market. • As a result, multinational hotel chains, food companies, and entertainment venues take an interest in the destination and develop operations with the aim of offering world-class amenities and profiting from the destination. • Numerous large corporations begin investing in tourism facilities at the destination as they recognise the area's emerging potential. • The pace of development accelerates, which further increases the quality of life for local residents; the destination becomes more available. • Marketing and advertisement is very time-consuming. Infrastructure is modernised. Tourist attractions, both natural and man-made, are created. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 14 • This stage demonstrates the equal participation of the government, local residents, and private players. • This also aids in increasing the number of tourists and creates a significant number of jobs for the local community. • At this point, marketing and promotional campaigns typically play a significant role, as the destination begins to develop a following among travellers. • Numerous stakeholders make numerous efforts to expand the destination and increase tourist traffic to the destination. • At this point, there is tremendous opportunity for job creation in a variety of sectors and for investment in tourism-related businesses. • Additionally, the development stage boosts the destination's economy and contributes to the nation's growth by generating foreign exchange. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 15 • Consolidation stage • This is the fourth stage in the life cycle of a tourism product. At this point, the local economy is almost certainly dominated by tourism-related activities. • At this point, the local community begins to earn a significant amount of financial resources, which aids in enhancing the hosts' quality of life. • At this point, the local economy becomes reliant on tourism. • The destination's tourist volume is constantly rising. Increased promotional and marketing campaigns are made to draw more tourists to the destination. • Both national and international tour operators offer tourist services. • Slowly, the destination's popularity wanes as the goods on offer become obsolete, and negative impacts of tourism activities can be seen on the destination, its natural beauty, natural resources and climate, on culture, on the attractions, and so forth. • If appropriate steps and policies are implemented at this point, the destination's life can be extended and the destination can be sustained for future generations. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 16 • At this point, careful execution of planned policies is required, and the destination and its resources can be preserved. • Local communities begin to withdraw from other industries or activities such as farming and fishing during this stage, resulting in the demise of these industries. • Historically significant infrastructure, such as buildings, is converted into accommodation units such as heritage hotels, guest houses, and homestays. • As a result, some historic structures lose their distinctive characteristics or elegance or become unattractive, potentially resulting in a decrease in clientele. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 17 • Stagnation Stage • This is the fifth stage in the life cycle of a tourism product. • This stage occurs when the destination's carrying capacity approaches its final limit or is surpassed. • As a consequence, economic, social, cultural, and environmental problems grow. • Artificial attractions begin to supplant natural or cultural attractions, elevating the destination's trendy status. • This would result in the loss of the destination's unique characteristics, implying that the destination has begun to lose its allure and USPs. • And the number of visitors visiting that particular destination gradually declines or decreases. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 18 • Additionally, there is an increase in rivalry from other players, which may result in the loss of authentic and exclusive features, as well as rowdiness. • Which further results in a decline in tourist visits and a significant impact on local businesses and services? • For instance, if the destination is a beach that has become overcrowded and overrun with garbage and rubbish, this will almost certainly halt the destination's development. • At this point in time, decisive action is required; otherwise, the number of tourists visiting the destination will begin to decline, affecting local businesses and services. • Which would ultimately have an impact on the destination's economy, culture, and current climate. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 19 • Decline or rejuvenation Stage • This is the final and sixth stage of the life cycle of a tourism product. • From the point of stagnation, there are two possible outcomes: decline in tourist movement or rejuvenation, which entails the destination's re-growth or re-introduction of new tourism items such as attractions and other tourist facilities. • A destination's decline can be gradual or sudden. • The number of visitors will begin to decline or decrease, and frequent visitors will be replaced by tourists seeking an affordable/cheap vacation or ride. • Tourists' travel patterns begin to change, and they are drawn to new and stunning destinations. The destination devolves into a tourism slum or becomes completely devoid of tourism activity. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 20 • Since the number of visitors visiting the destination is rapidly declining, there are more negative consequences for the destination. • And the attractions begin to lose their allure and unique selling points. • High prices, overcrowding, environmental pollution, political uncertainty, high crime rates, and overrated attractions are only a few of the major factors contributing to a destination's decline or stagnation in tourist arrivals. • Which results in a decrease in the number of visitors visiting the destination, which almost always results in the destination declining or declining. • Rejuvenation is the process of rationally altering and reestablishing the resource base. Numerous investments are made by private businesses, governments, or both for the purpose of transforming the destination and launching new tourism product lines. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 21 • Additionally, they begin developing a new range of artificial attractions inside the original destination in order to increase its popularity and draw additional visitors. • Additionally, previously untapped natural resources are used. • This will eventually result in the start of another loop. • The reasons for a destination's rejuvenation include thorough research and analysis of product development, appropriate measures by the local administration, identification of new development areas, and the development of world-class infrastructure. • Otherwise, the destination will experience a permanent decline. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE INTRODUCTION STAGE 22 • Marketing managers must develop plans for the product's introduction stage. • Four fundamental marketing mix components: commodity, price, promotion, and distribution. • In terms of marketing mix components, a business can opt for a skimming or penetration strategy. It can employ either a rapid or a slow skimming strategy. • Similarly, the organization can choose a strategy of rapid or slow penetration. • Rapid Skimming Strategy • If the company chooses the rapid skimming approach, it arbitrarily raises the price of the commodity to entice the early consumer. This technique is used to maximise benefit in the short term. • Additionally, businesses following this strategy can focus on producing higher-quality goods, aggressively marketing them, and distributing them through selective distribution channels. • This strategy will work well if a sizable percentage of potential consumers are unaware of the product's existence; they are willing to pay a premium price for the product's higher quality; and the delivery meets their requirements. • www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE INTRODUCTION STAGE 23 • Slow Skimming Strategy • The slow skimming strategy involves offering a product to the consumer at a premium price, but with less aggressive marketing than the fast skimming strategy. • Following this approach, the business will earn a sizable profit. Due to the fact that the marketing costs are lower but the price is higher, the company is able to earn a sizable profit. • A company's slow skimming strategy may be effective if the majority of potential customers are aware of the product, willing to pay a premium price, and competition is either non- existent or minimal. • Rapid Penetration Strategy • In comparison, the rapid penetration strategy requires the firm to maintain a low price when actively promoting it. • The aim is to deter competition and initially cater to a larger segment of the market. • This strategy could be successful if the market is sizable, the majority of the market is unaware of the product and extremely price sensitive, and there is little possible competition. • By lowering the price and receiving a lower profit margin, fewer entrants will enter the market than would be the case for a skim approach. • The executive now has more time to strengthen its market position and increase market share. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE INTRODUCTION STAGE 24 • Slow Penetration Strategy • The slow penetration strategy involves the introduction of a commodity into the market at a low price. Additionally, promotion under this strategy is not offensive. • If the company determines that the market is sizable, that consumers are largely aware of the product and price sensitive, and that competition exists, it may opt for the slow-penetration strategy. • It will assist the company in capturing a sizable portion of the market by leveraging its high price and low promotional costs. • Penetration technique is typically used when the executive plans to hold the product on the market for the duration of the product's life cycle, or for the majority of it. • Rather than easily recouping expenses and profiting like a skim approach does, the marketing executive aims for even greater long-term income. • While firms have effectively employed both techniques, penetration is the more prevalent. It is used in almost every form of product, while skim is usually reserved for trend, fad, and novelty pieces with a relatively short shelf life www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE GROWTH STAGE 25 • Sales increase steadily during the growth stage; profits plateau and then begin to decline. Numerous new variables define the growth stage of a product's lifecycle. • To begin, sales and profits increase rapidly. • Second, competitors have drawn more competitors to the growing market than would survive. • Third, cash flow may remain negative as a result of the firm's efforts to gain a significant market share advantage over competitors. At this point, the product is prosperous. • If the commodity gains consumer recognition, distribution networks become more available as wholesalers and retailers demonstrate an increased willingness to carry it. • This prosperity will also attract other businesses, resulting in the most rivals entering the market. • When confronted with an increasing variety of items, the customer can become confused and unsure about which to choose. • During the growth stage, the market is turbulent as new entrants join and compete for market share. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE GROWTH STAGE 26 • Also determining the precise market share is difficult due to the rapid growth of new users. This is not to say that profits are not possible at this point. Profits generated are reinvested to accelerate the growth of the product. • It is possible that a business makes more profit at this point as profits increase and promotional expenses are distributed over a greater volume of sales. • Additionally, as the business gains experience, the cost of output per unit decreases, resulting in increased profit. • Due to the increased competition and expansion of the business during the growth stage, the marketing executive shifts from a strategy of cultivating demand to one of market entrenchment – the battle for brand recognition and market share. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE GROWTH STAGE 27 • In a similar vein, increased rivalry and the ability to expand market share aim to mitigate any minor price reductions. However, the price remains reasonably high, and the business profits handsomely. • During the growth stage, the marketer's position changes to one of persuading customers and continuously informing them of the product's benefits, ensuring ease of purchase by expanding distribution channels, manipulating price to keep the product affordable, and reinforcing the product's brand image. • The growth stage is crucial for a product's survival because competitive reactions to the product's success during this stage would have an effect on the product's life expectancy. • During the growth stage, a business develops a marketing plan to foster high brand loyalty and competes against aggressive product emulation. • An company attempts to increase its market share by defining and highlighting the product's benefits. At this point, a business can also pursue aggressive price reductions. • Additionally, it can diversify its product lines and provide a broader selection in order to compete. • nd fulfil their limited target markets. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE GROWTH STAGE 28 • Another option is to pursue a market segmentation strategy and sell the product under a variety of distributor- or other producer-owned labels. • Additionally, a business may conduct a creative promotional campaign to entice potential buyers. Additionally, marketers may change warranty and service terms to make them more appealing than they were previously. • The alternative is to make the commodity widely accessible in order to hit a mass market. Adopting one or more of these tactics will help a business maintain a competitive edge. • Maturity is the third stage. • Almost all goods will experience a period of slower development. This is the period of a product's lifecycle that we refer to as maturity. • At this point, demand for goods is levelling off, and competition is eroding profit margins. At this point, a business needs an extremely efficient organisational structure, such as a functional pyramid, in order to maximise profits from consistent sales. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE MATURITY STAGE 29 • The maturity stage is defined by the peaking of the product's revenue and benefit curves. This stage can be divided into three parts. • Growth maturity is the first step of this stage, which occurs when the rate of revenue growth begins to slow. While revenues continue to increase during this period, the pace of growth is significantly slower. When the product enters this point, all distribution networks are secured. • The product reaches the majority of potential buyers, with the exception of a few laggards who may begin purchasing during this process. • The second stage is stable maturity, by which the market has already been saturated and as a result, profits have flattened. Due to the market's saturation, potential revenues will be determined by replacement purchases and population growth. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE MATURITY STAGE 30 • The final step of this stage is decaying maturity, during which sales begin to decline rapidly. This stage is marked by intense rivalry, as the marketplace is saturated with competing brands. • Competitors highlight the enhancements and variations in their product models. As a result, weaker competitors are pushed out or lose interest in the product at this time. • Businesses that do not achieve a healthy market share during the growth period fail to survive. Sales growth slows as the majority of future customers are attained. • Profitability is strong but begins to erode as industry leaders reduce prices in order to capture market share. Profits remain high, and mature products become the company's cash cows, generating funds for new product growth. At this stage, the price of a commodity would also fall precipitously as a result of widespread availability of a substitute. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE MATURITY STAGE 31 • As revenue growth slows, companies face overcapacity, resulting in intense competition. • To compete effectively in today's market, businesses greatly increase their advertisement, marketing, and research and development expenses. • These increased costs further erode firms' earnings. • As a result of this condition, weaker firms are forced to withdraw from the market, and only the most competent firms remain. • Among the survivors, two groups of companies exist in the marketplace: those that are giants, like the quality leader, service leader, and cost leader, and those that serve a www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE MATURITY STAGE 32 • To compete successfully in this form of business setting, the marketing executive can extend the product line by offering a range of models and designs in order to widen the product's appeal, creating something for all in the hope of retaining sales. • However, this results in an increase in the product's costs as shorter production runs are required for each model and style and inventory are built up, both of which result in diseconomies of scale. • Reduced rates combined with increased costs result in a decreasing profit curve. Indeed, as the maturity stage progresses, some rivals will withdraw their goods due to insufficient or non-existent earnings. • Many who remain in the market invest in new promotional and distribution efforts; advertisement and dealer-based marketing are both popular during this time. • There is no reason to believe that a mature product is static; enhancements to the basic product can be created, and variants can be provided. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE MATURITY STAGE 33 • Although market leaders typically have the capital to broaden their offerings, gaining market share is challenging and costly. • Thus, the best-managed companies strive to maintain and increase their share marginally while diverting revenues from profitable mature products into product production and introduction. • At this point, a company must weigh the benefits of revitalising the product, allowing it to decline gradually, or discontinuing it and preparing a replacement. • There are several options for a business to revitalise its products, and the method chosen will depend on the reason(s) for the product's initial decline. • If this happened as a result of the launch of a new competitive product with additional benefits, the business may choose to enhance its existing product with similar benefits, to introduce new but distinct services, or to reduce its current price and emphasise its value for money, possibly in order to reach a new, more price-sensitive market. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE MATURITY STAGE 34 • If, on the other hand, the organisation believes that the competing product is not superior to its own, the decision to increase advertisement spending or launch a promotional incentive to reclaim market share can be made. • Marketing is about developing plans that are either intended to mitigate risks or to capitalise on market opportunities. • If you recall the marketing's 'four Ps,' you'll notice that a firm's actions are restricted to one of four areas: the commodity, the price, the advertising strategy, or the location – where and how the product can be purchased. • Any of the above tactics is intended to increase the market's size. • This can be accomplished by converting nonusers to users, expanding into new consumer segments, acquiring customers from rivals, ensuring repeat sales, increasing the volume of use peruse by customers, and broadening the product's uses. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE DECLINE STAGE 35 • Decline • At some point in time, the sale of a product is bound to decline. This point is termed as the decline or the final stage of the product’s life cycle. • Most products eventually pass from maturity to a fourth stage of the life-cycle: decline and eventual elimination. This stage is characterized by a further dropout of competitors until only a few remain. • Profits begin to decline precipitously at this stage, often as a result of the firm's excess ability. The product's marketing is curtailed or terminated. Any residual profit will not be reinvested in the commodity, and no effort will be made to re-establish demand. • However, with proper management, a diminishing product's existence may be extended for some time. There are a variety of reasons why a product's sales decrease. • One of the primary reasons for this is the availability of new revolutionary goods as a result of technological advancements. The other possibility is that social patterns or consumer preferences change, causing the product's sales to plummet. • www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE DECLINE STAGE 36 • Due to declining earnings, companies alter their strategies; some firms also withdraw from the industry. • The remaining firms could reduce their product offerings in order to make their operations more cost effective. • Others can exit unprofitable segments. Yet others can significantly reduce their promotional budgets in order to further reduce the prices of their offers. Certain businesses can often plan to raise the price of their product because customers often purchase it as a replacement or for a specialised need. • Only when companies begin to liquidate inventories in preparation for the product's withdrawal will they begin to reduce prices. • Perhaps a very small number of firms would benefit from this point. The manufacturing costs will be relatively modest, and marketing activities will essentially cease, allowing for a reasonable profit margin.. • If sales of a product decrease, the reputation of respectability and quality deteriorates, and the business cannot afford to be directly associated with it. For a declining industry, a marketer may employ a harvesting strategy, a divestiture strategy, a niche or concentrate strategy, a differentiation strategy, or a low-cost strategy. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE DECLINE STAGE 37 • While nothing can be done regarding fundamental changes in customer tastes and the entry of competitive goods, the firm has a variety of options for products with declining sales. • Prior to considering alternatives, it is important to recognise marginal goods. Managers must make decisions about their destiny after they are found. • Identifying poor or mediocre goods is a critical challenge for marketers. In smaller businesses, managers are aware of deteriorating goods, and therefore no formal evaluation process is needed. • When product lines are extensive, a committee should be formed to find weak points. Due to the risk of prejudice, this duty should not be completely delegated to the rest of the marketing department. • The product review committee should be composed of executives from marketing, manufacturing, buying, control, human resources, and research and development. The evaluation process should be two-staged. • Prior to screening products, pricing patterns, market share trends, gross margin trends, and overhead trends should be considered. If a product does not meet the minimum requirements for any of the above variables, it should be subjected to further analysis. www.cuidol.in All right are reserved with CU-IDOL

MARKETING STRATEGIES IN THE DECLINE STAGE 38 • Companies can also attempt to resurrect a failing product by changing the advertising firm in the hope that the new firm can create and launch a more innovative marketing campaign. • A business could decide to discontinue an existing item from its product line based on the product review committee's report (s). The first course of action that a business can take in this situation is to do nothing and wait until the item is no longer in demand. • Here, the business will discontinue all promotional efforts and rely entirely on repeat purchases from existing customers. • Another option is to continue selling a declining product but produce it through a contract with another business. Another possibility is to manufacture the item but market it by other licensing agreements. • The alternative approach is to sell the item to another company and delegate production and marketing to them. If none of the above tactics proves to be appropriate, the firm can dispose of the commodity with the least amount of inconvenience to the parties concerned. www.cuidol.in All right are reserved with CU-IDOL

STAGES OF PRODUCT OF LIFE CYCLE 39 • To ascertain the following: the company's or a particular product line's strengths, limitations, opportunities, and challenges. • Strengths: All the good and useful resources and capabilities what can help to develop and maintain an advantage on the market. Examples: patents about technology or processes, know-how, exclusive access to various resources, advantage in location, great previous customer satisfaction etc. • Weaknesses: All the things what could be strengths, if a marketer could have them, but at analysed time they are not present. Examples: Lack of technology and equipment, lack of special resources, poor location, high cost structure, weak brand etc. • Opportunities: field of improvement in case of profit and growth because of changes and easy to use opportunities, what has advantage for the company. Example: new technologies, cheaper resources, free but effective viral marketing, loosening of regulations. • Threats: Changes in the external and/or internal environment, what presents disadvantage for the company. Example: more expensive resources, more strict regulations, changes in international law etc. www.cuidol.in All right are reserved with CU-IDOL

40 • The internal environment: That part of the company and its products environment what can be effected and changed by the company, is called internal environment. • First of all it focuses on “Target costumers”, than to support it, “Product, Price, Promotion, Place”. Also all the marketing activities belong here: the “Marketing Planning – Marketing Implementation – Marketing Control – Marketing Analysis”. The least effected internal environment elements are the: “Marketing Channels, Publics, Competitors, Suppliers ” • The task environment : • Markets: The scale, development, geographic distribution, and profitability of markets. Define significant market segments • Customer feedback on product quality, operation, and price. Analyze customer purchasing decisions. • Concurrents: Compile a list of major competitors. SWOT analysis of competitors. • Channels: How well are the most frequently used channels for product distribution performing? • Suppliers: Study of resource availability and supplier patterns. • Publics: Important publics for identifying opportunities and risks. How to handle them. www.cuidol.in All right are reserved with CU-IDOL

41 • The public environment: The public realm is a subset of the vast internal world. • The public environment encompasses a range of various sized groups of individuals and organisations. • They have a synergistic effect on goods and services. • The corporation has some influence over them. • The macroenvironment consists of the following: The world that surrounds a business has an impact on it, but the business has no influence over it. It is composed of the following • components: the demographic-economic environment, the technological-natural environment, the social-cultural environment, and the political-legal environment. www.cuidol.in All right are reserved with CU-IDOL

42 The life cycle of the tourism product www.cuidol.in All right are reserved with CU-IDOL

43 The life cycle of the tourism product • As in other economic sectors, tourism follows a \"product life cycle\", with a curve similar to that of the above graph. In this process several stages can be identified: • Stage 1: Discovery : • During the cycle's initial \"discovery period,\" a small number of unobtrusive tourists arrive in search of \"untainted\" destinations. The majority of these early \"explorer\" visitors speak the local language and associate with the indigenous community. The social impact is generally minimal at this point, and resident attitudes toward tourism are generally favourable. www.cuidol.in All right are reserved with CU-IDOL

44 • Stage 2: Launch : • This stage sees a rise in the number of incoming visitors. • The host group provides facilities in response to the growing number of tourists. • Businesses continue to be family-owned, and the relationship between visitor and resident is still harmonious. • Toward the end of this point, visitor numbers increase and the community develops into a tourist destination. • External stakeholders become active in the development of businesses and visitor facilities. • This is usually the stage at which foreign investment by TNCs (Transnational Corporations) joins the period. • Migrant workers attracted to tourist-related jobs could join the community, reducing resident-visitor interaction. • As the novelty of new visitor arrivals decreases, the tourist relationship transforms into one of company. Culturally conscious \"explorers\" migrate to new \"unspoiled\" regions, where they are supplanted by the mass market. www.cuidol.in All right are reserved with CU-IDOL

45 • Stage 3: Stagnation : • The stage in which saturation is reached. • The quality of tourist services falls, demand levels off, and the environmental degradation of the tourist destination begins to be obvious and worrying. • The tourist destination at this stage is said to have reached 'maturity'. Mature tourist destinations • Stage 4: Decline • which represents the current state of mature tourist destinations on the Costa Brava in Spain. • Falling profits lead to foreign-owned businesses withdrawing and the community is left to \"pick up the pieces www.cuidol.in All right are reserved with CU-IDOL

Summary 46 • The most notable characteristic of the maturity stage is the peaking of the product’s sales and profit curves. • During the growth stage, sales rise rapidly; profits reach a peak and then start to decline • Stagnation stage in which saturation is reached. • Migrant workers, attracted by the prospect of tourist-related jobs, may enter the community and reduce resident contact with visitors. www.cuidol.in All right are reserved with CU-IDOL

Reference 47 • Reference books • Kotler, Philip : Marketing Management & Hospitality and Tourism Marketing. • Sinha, P.C : Tourism marketing. • Vearne, Morrisson Alison: Hospitality marketing • Kotler, Philip and Armstrong Philip, Principle of Marketing, 1999, Prentice-Hall India, 1999 www.cuidol.in All right are reserved with CU-IDOL

www.cuidol.in 48 THANK YOU For queries Email: [email protected] All right are reserved with CU-IDOL