Leveraging Your Product’s Life Cycle in International Markets

Becky DeStigter | March 10, 2013 | Export Markets, Export Finance
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The more I work with companies selling products in various points along the Product Life Cycle, the more I believe that your product's life-cycle stage profoundly affects how you market that product. When your markets are in other countries, it is also important to consider that your product may be at different stages in different markets. For instance, Apple's iPads may soon be reaching the Late Majority Stage in the U.S. But in Bangladesh, this product is definitely still considered the domain of Innovators. Apple purposefully innovates in order to keep its focus on Innovators and Early Adopters.

 
Product_LifeCycle_ChalkboardTom sits in his midwest office wondering if he is doing all he can to sell his specialized machinery into international glass markets. His fellow sales directors in nearby companies are trying all sorts of new marketing programs around social media and QR codes. Should he be working to change his company's marketing to keep pace with the times, or can he reach his sales goals and market potential sticking with what seems to work today. As with most questions in international markets, it depends.
 
The more I work with companies selling products in various points along the Product Life Cycle, the more I believe that your product's life-cycle stage profoundly affects how you market that product. When your markets are in other countries, it is also important to consider that your product may be at different stages in different markets. For instance, Apple's iPads may soon be reaching the Late Majority Stage in the U.S. But in Bangladesh, this product is definitely still considered the domain of Innovators. Apple purposefully innovates in order to keep its focus on Innovators and Early Adopters.
 
Now back to Tom's dilemma. As a sales director in a technical industry, Tom needs to identify where his products fit in their Product Life Cycle and then leverage that stage to help get the most profits out of international markets. Here are examples on how to do this in every stage of the cycle:
 
Innovators—The greatest marketing challenge for a product that is so new it's actually innovative? Market education. Internationally, it helps to forget about national borders and focus on amplifying your messages. Try to get publicity and speaking engagements. Attempt to recruit industry thought leaders to try out your new product for a reduced price in exchange for giving a positive testimonial. In the beginning, it's not about where the business comes from, it's about getting ANY business at all.
 
Early Adopters—Now that at least some in the market know about your type of product, it's time to look for the kind of customers that will take a chance with new technology and ideas. Internationally, it would be wise to identify any industry clusters. These are areas where an industry has an ecosystem with suppliers, producers and oftentimes a local trained workforce. Here are some examples of industry clusters:
  • Software Clusters: Bangalore, India; Silicon Valley, USA; Vancouver, Canada; Tel Aviv, Israel
  • Aluminum Can Clusters: Aurangabad, India; Beijing area, China
  • Alternative Energy Clusters: Denver, USA; Munich, Germany; Oslo, Norway
Focusing on where an industry has several potential clients can save time and financial resources. At this product stage, it is not critical to saturate the market. Instead, it is focusing only on those clients who would be willing to try your new product to hopefully gain competitive advantage over slower-adopting competitors.
 
Early Majority—You will know that a product or product category has hit the early majority when you no longer have to explain what your product does. People in the industry know about it and more are considering changing over. This is the time to hire and train competent marketing and sales staff who can serve not only your home market, but markets overseas. When it makes sense, hire bilingual staff. In this stage it is not uncommon to see new market entrants or even large industry players watching to see which technologies they would like to acquire from smaller companies. Consider strategic international partnerships to shore up your companies weaknesses. For instance, if you know that India is an important market for your products, consider partnering with an existing Indian company with products compatible to yours to share marketing data and client lists. Consider entering new international markets where the opportunity justifies the initial costs.
 
Late Majority—By now, markets have begun to saturate. In some markets, new innovations may have already been developed to replace aging products. But many products, particularly in industrial market segments, can successfully remain in late majority for even decades. More than ever, sales and marketing efforts hinge on the business relationship between supplier and customer. Customer service takes on a new level of importance worldwide. Production efficiencies are more critical as price pressures can squeeze profit margins. This may be a time to look at some new international markets, but ONLY where the product is still in an earlier product life stage.
 
Laggards—If your product happens to have hit the last product stage, hopefully you have extremely loyal customers who appreciate your products and continue to pay to service or support them. Tom may be in this product stage, and he should seriously be considering new product development or acquisition. There is no market growth at this stage, and if there is profit to be made, someone will likely figure out a way to improve your part of the market. If this product is still profitable, it is time to augment your product offering with products that have greater market growth potential.
 
I hope this article was of some use to you in your international marketing planning. For more information about international marketing particularly in B2B markets, please visit The International Entrepreneur.
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