netrashetty
Netra Shetty
DTE Energy Co. (NYSE: DTE) is a Detroit, Michigan-based utility incorporated in 1995 involved in the development and management of energy-related businesses and services nationwide.
DTE Energy's largest operating subsidiaries are Detroit Edison, an investor-owned electric utility serving 2.1 million customers in Southeastern Michigan, and Michigan Consolidated Gas Co. (MichCon), a natural gas utility serving 1.2 million customers in Michigan.
The name "DTE" is taken from the stock symbol for Detroit Edison, DTE
nging conditions. The marketing mix consists of the product, promotion, price, and distribution. Each element must change with the product life cycle if the company expects to maximize sales and profits. It is important to note that as products move through each stage of the life cycle, they should be monitored and re-evaluated in terms of reducing both production costs and the time it takes to make a product or service profitable with its new position.
Strategic options for products during the product life cycle are examined below.
INTRODUCTION STAGE.
In the introduction stage, the product's novelty and lack of competition dominate the marketing strategy. The public is not aware of the product and does not know what benefits it offers them.
Product strategy is focused on introducing one model. Since the public is unaware of the product, to offer more models could confuse them as they learn the purpose of the product. This model may offer various options, but there are usually no major variations on the basic idea of the product. The cost of development may also prohibit the company from developing more models for introduction. With no competition yet in the product category, one model is adequate for introduction.
Since the product is new, persuading the market to buy the product is of secondary importance to informing the public that the product exists. It is the innovators who will begin to buy the product, and they need to be informed. With only one company offering the product, those innovators that decide to purchase the product have only one company from which they can purchase the product. Consequently, the promotion efforts concentrate on informing the public of the product benefits and the company producing the product. Persuasion to buy a particular brand is not needed in the introduction stage.
The pricing policy offers the company an opportunity to regain some development costs. Since the company's product is not only new to the company, but also introduces a new product, the company can use a skimming pricing strategy; that is, a very high price for the new product. Though the high price of the new product may deter some potential customers, many innovators and early adopters will pay the high price to own the new product. The first electronic calculators, for example, were quite expensive. If the product is easily copied, however, the developer may want to use a low-price penetration policy to deter future competition.
Since there are few purchasers in the introduction stage, the distribution does not need to be widespread. The innovators are risk takers and desire to purchase something new. Consequently, they may seek out the distributors carrying the new product, and only a few distributors will suffice.
GROWTH STAGE.
In the growth stage, the early adopters, followed by the early majority, begin to consume the product in growing numbers. The increasing sales result in the emergence of profits rather than losses.
During the early part of the growth stage, the company can continue its product policy of offering one basic model. However, if the new product group is successful, eventually competitors will offer their own products to compete in the new category. At that point, the original company will need to offer more models. The models should be differentiated from one another so that the company can continue to attract the new customers coming into the market.
Even with competition beginning to offer their products in the new category, the original company still dominates the market. However, as the market leader rather than a monopoly, the company will need to change its promotion policy of informing the public about their new product and new product category.
With an informing policy, the market leader would still receive the majority of new sales. Unfortunately for the original company, the competition will not be using an informative policy. They will be trying to persuade the public why their product is better than the market leader's product. Consequently, the market leader should switch to a persuasive promotion policy.
As the competition enters the market, they will probably be offering products at prices lower than the price of the original product. This is a penetration pricing policy designed to take sales away from the market leader. If the original company used a skimming pricing policy, its continued use would surely lead to rapid lost sales to the competition unless it is altered. Prices should be lowered so that sales can continue to grow, and the competition kept at bay.
In a growing market, the company's exclusive distribution policy would limit the potential growth for the firm, and sales would go to the competition. Consequently, the company must increase its product distribution to maintain its leadership in the market.
MATURITY STAGE.
Many competitors characterize the maturity stage. With the large number of firms producing products, the competition for customers becomes quite intense, and profits decline. The strategy for firms during the maturity stage becomes one of survival, as many competitors will eventually withdraw from the market.
With many companies offering several models of the product, the number of products on the market becomes tremendous. The original company must continue differentiating their models so that the market is aware of the differences in the company's products and the competitors' products. The customers are going to ask why they should buy a particular company's product; just because the product was the first on the market is not going to persuade the customers to continue buying the product. Quality, styling, and product features are a few of the means of differentiating the product from the competition.
During the maturity stage, the need to inform the public has long since passed. Now, the promotion strategy focus is on continuing the persuasion tactics started during the growth stage. The purpose of persuasion is to position the product to the market, which involves creating an image for a product. The image should not be an advertiser's creation, but based on the reality of the product.
The differentiation methods of quality, styling, and features are excellent means of positioning a product. For example, a Chevrolet Corvette and Porsche Boxster are both sports cars, but consumers see the different positions of the cars. The company differentiates its products and uses promotion to create the different position image. Each company hopes that its position is preferred by the consumers.
With the intense competition, management keeps the price of the product to its lowest possible level. For example, the competition for entry-level personal computers has now shifted to offering the lowest price. All of the companies in a mature market must now watch costs carefully.
Different business organizations give importance to focusing on how it can successfully penetrate the market in terms of providing their consumers with their needed products or services. With the fast-changing world today due to the advancement of science, communication and technology, consumers have the access to the changes happening in the environment. In using the computers and the Internet, consumers and business organizations as well, can interact right away with one another in relation to the products and services being rendered. Furthermore, consumers are able to demand from business organizations to compensate the value of their money. This pressures business organizations to continuously improve on their products and services for the benefit of the consumers, and most especially to benefit from the trade. This is also the reason why most business organizations invest and thoroughly fund their Research and Development System for the purpose of improvement, innovation and invention.
With the increase of the demand of consumers and their ability to topple a business organization in the market today, many business organizations device and think off ways on how to maintain a good reputation and make their products and services marketable. This involves the concepts of marketing strategies, which help different business organizations to carefully evaluate, plan, construct, and implement tactics in making sure their success in the market. These strategies enable business organizations to “stay alive” and attract more or new consumers to patronize their offered products and services. With the changes happening in the Technology Age, the role of computers and the Internet is crucial and is deeply involved in constructing and implementing effective marketing strategies.
DTE Energy's largest operating subsidiaries are Detroit Edison, an investor-owned electric utility serving 2.1 million customers in Southeastern Michigan, and Michigan Consolidated Gas Co. (MichCon), a natural gas utility serving 1.2 million customers in Michigan.
The name "DTE" is taken from the stock symbol for Detroit Edison, DTE
nging conditions. The marketing mix consists of the product, promotion, price, and distribution. Each element must change with the product life cycle if the company expects to maximize sales and profits. It is important to note that as products move through each stage of the life cycle, they should be monitored and re-evaluated in terms of reducing both production costs and the time it takes to make a product or service profitable with its new position.
Strategic options for products during the product life cycle are examined below.
INTRODUCTION STAGE.
In the introduction stage, the product's novelty and lack of competition dominate the marketing strategy. The public is not aware of the product and does not know what benefits it offers them.
Product strategy is focused on introducing one model. Since the public is unaware of the product, to offer more models could confuse them as they learn the purpose of the product. This model may offer various options, but there are usually no major variations on the basic idea of the product. The cost of development may also prohibit the company from developing more models for introduction. With no competition yet in the product category, one model is adequate for introduction.
Since the product is new, persuading the market to buy the product is of secondary importance to informing the public that the product exists. It is the innovators who will begin to buy the product, and they need to be informed. With only one company offering the product, those innovators that decide to purchase the product have only one company from which they can purchase the product. Consequently, the promotion efforts concentrate on informing the public of the product benefits and the company producing the product. Persuasion to buy a particular brand is not needed in the introduction stage.
The pricing policy offers the company an opportunity to regain some development costs. Since the company's product is not only new to the company, but also introduces a new product, the company can use a skimming pricing strategy; that is, a very high price for the new product. Though the high price of the new product may deter some potential customers, many innovators and early adopters will pay the high price to own the new product. The first electronic calculators, for example, were quite expensive. If the product is easily copied, however, the developer may want to use a low-price penetration policy to deter future competition.
Since there are few purchasers in the introduction stage, the distribution does not need to be widespread. The innovators are risk takers and desire to purchase something new. Consequently, they may seek out the distributors carrying the new product, and only a few distributors will suffice.
GROWTH STAGE.
In the growth stage, the early adopters, followed by the early majority, begin to consume the product in growing numbers. The increasing sales result in the emergence of profits rather than losses.
During the early part of the growth stage, the company can continue its product policy of offering one basic model. However, if the new product group is successful, eventually competitors will offer their own products to compete in the new category. At that point, the original company will need to offer more models. The models should be differentiated from one another so that the company can continue to attract the new customers coming into the market.
Even with competition beginning to offer their products in the new category, the original company still dominates the market. However, as the market leader rather than a monopoly, the company will need to change its promotion policy of informing the public about their new product and new product category.
With an informing policy, the market leader would still receive the majority of new sales. Unfortunately for the original company, the competition will not be using an informative policy. They will be trying to persuade the public why their product is better than the market leader's product. Consequently, the market leader should switch to a persuasive promotion policy.
As the competition enters the market, they will probably be offering products at prices lower than the price of the original product. This is a penetration pricing policy designed to take sales away from the market leader. If the original company used a skimming pricing policy, its continued use would surely lead to rapid lost sales to the competition unless it is altered. Prices should be lowered so that sales can continue to grow, and the competition kept at bay.
In a growing market, the company's exclusive distribution policy would limit the potential growth for the firm, and sales would go to the competition. Consequently, the company must increase its product distribution to maintain its leadership in the market.
MATURITY STAGE.
Many competitors characterize the maturity stage. With the large number of firms producing products, the competition for customers becomes quite intense, and profits decline. The strategy for firms during the maturity stage becomes one of survival, as many competitors will eventually withdraw from the market.
With many companies offering several models of the product, the number of products on the market becomes tremendous. The original company must continue differentiating their models so that the market is aware of the differences in the company's products and the competitors' products. The customers are going to ask why they should buy a particular company's product; just because the product was the first on the market is not going to persuade the customers to continue buying the product. Quality, styling, and product features are a few of the means of differentiating the product from the competition.
During the maturity stage, the need to inform the public has long since passed. Now, the promotion strategy focus is on continuing the persuasion tactics started during the growth stage. The purpose of persuasion is to position the product to the market, which involves creating an image for a product. The image should not be an advertiser's creation, but based on the reality of the product.
The differentiation methods of quality, styling, and features are excellent means of positioning a product. For example, a Chevrolet Corvette and Porsche Boxster are both sports cars, but consumers see the different positions of the cars. The company differentiates its products and uses promotion to create the different position image. Each company hopes that its position is preferred by the consumers.
With the intense competition, management keeps the price of the product to its lowest possible level. For example, the competition for entry-level personal computers has now shifted to offering the lowest price. All of the companies in a mature market must now watch costs carefully.
Different business organizations give importance to focusing on how it can successfully penetrate the market in terms of providing their consumers with their needed products or services. With the fast-changing world today due to the advancement of science, communication and technology, consumers have the access to the changes happening in the environment. In using the computers and the Internet, consumers and business organizations as well, can interact right away with one another in relation to the products and services being rendered. Furthermore, consumers are able to demand from business organizations to compensate the value of their money. This pressures business organizations to continuously improve on their products and services for the benefit of the consumers, and most especially to benefit from the trade. This is also the reason why most business organizations invest and thoroughly fund their Research and Development System for the purpose of improvement, innovation and invention.
With the increase of the demand of consumers and their ability to topple a business organization in the market today, many business organizations device and think off ways on how to maintain a good reputation and make their products and services marketable. This involves the concepts of marketing strategies, which help different business organizations to carefully evaluate, plan, construct, and implement tactics in making sure their success in the market. These strategies enable business organizations to “stay alive” and attract more or new consumers to patronize their offered products and services. With the changes happening in the Technology Age, the role of computers and the Internet is crucial and is deeply involved in constructing and implementing effective marketing strategies.
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