The new PowerBar GelBar combines two growing market segments into one – the growing segment of energy drinks and the growing segment, while moving rapidly towards the mature energy bars market. At this stage of product development, it is necessary to focus on the stage of the product lifecycle for the strip, the upcoming stages and our contingency plan for each as they are reached, the marketing mix actions that can be taken to promote the product, and briefly touch on the initial pricing strategy.
The current stage of the product life cycle
Despite the fact that GelBar combines a growing product and a growing/mature product, I think GelBar is in the process of rolling it out. However, due to the nature of the ingredients, it is a non-disrupting product which is likely to reflect a low learning curve product. This means that the application phase will be short and fast. For this reason, I anticipate competition for GelBar quickly once the product is launched.
There is some logic behind the claim that the product is actually an extension of PowerBar’s growth phase and a way for the company to stave off a regression in maturity. From a macro perspective, this is true, but the product itself has to start at the introduction stage. As the company will view the product as a new growth product, GelBar will enjoy market exposure and the potential of a large advertising budget that will allow it to penetrate the market quickly and with great customer awareness.
Planning for the future stages of the product life cycle
Introduction – Launching a product with intense marketing efforts and fast pricing. Pack the product in bright packages to attract customers to buy the product. Launching in limited markets to test customer feedback and correct problems in the product before mass market.
Growth – During this stage, I expect many competitors to enter the market. More GelBar flavors may be offered and the promotion will focus on the differences between GelBar and the competition. We will be expanding the sites offering GelBar as we roll out to launch the product in multiple markets.
Maturity – Keep introducing new product forms until GelBar reaches a full product line. Stock the product in all stores with the impulse buying section, including gas stations, sports stores, grocery stores and more.
Reject – Slowly cut tape production and offer replacement tapes to encourage customers to switch while reducing switching cost (i.e. reducing risk of loss according to prospector theory). Start replacing GelBar with the next innovation at selected outlets to test new products.
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Promote GelBar with the Marketing Mix – Three Strategies to Move the Product Forward
Product – With so many bars and energy drinks on the market, product packaging and ease of use are paramount. GelBar should be promoted with a product size similar to Snickers to facilitate the idea of a snack on the go. The physical packaging of the strip should confirm the mixture of ingredients contained within. Possible combinations include a two-tone packaging focusing on 5 Hour Energy orange and PowerBar gold or black and white to visually emphasize the two distinct ingredients.
Product assembly is also important. The tape should be available in individual form and in a package. This bundle model will allow the serious athlete to purchase 6 to 10 bars at a time at a discounted price per bar. By increasing the number of bars available for purchase at one time, GelBar appeals to premium athletes as well as discount membership stores like Sam’s Club or Costco.
Promotion – Since GelBar’s initial market is premium sports enthusiasts, advertising will be limited to clearly related sports events. Potential events and end user groups include community sporting events, high school sporting events, corporate sponsored sports, and professional athletes.
When the product matures in the product life cycle, public advertisements will be used. By engaging athletes at an early stage, natural promotion will occur as sports fans see athletes using GelBar at sporting events. Plus, GelBar can rent celebrity endorsements from these early professional sports adopters. This will increase GelBar’s visibility to the average consumer and will help drive sales as GelBar’s positioning is also expanded to include the growth and maturity stages of the product lifecycle.
Placement – GelBar is for serious athletes, so placement will initially be in high-end sports stores and venues such as professional or amateur league sporting events. These limited test markets will allow us to correct customer complaints about the new product before it is introduced to regional grocery and health food stores. Since we feel the GelBar could be a planned and impulsive purchase, the product should be stored in two locations within each location – near the cash register for impulsive purchases and near other energy bars for planned purchases.
Once the product is ripe, GelBar is a must-have at every gas station, discount membership retailer, grocery store, exercise facility, and gym equipment store. This significant market penetration will provide the most value to customers as it will be easy to access GelBar during exercise or at short notice.
Determine the price of GelBar to achieve these goals
GelBar is an initially high-quality product that becomes a mass consumer product as it matures. For this reason, a skimming pricing strategy will work best in the beginning. While GelBar should be given away at sporting events to reduce the effects of prospector theory to the end user initially, in the end the product should be priced above the market price of the energy bar when it is launched across a few select markets. This high price will ensure only the high-end athlete can purchase the tape and create the GelBar as a condition energy band.
However, as soon as competition begins to enter the market, the price has to be reformulated. By switching from a skimming pricing scheme to a penetration, GelBar will be able to lead the market and compete effectively with the new bars launched by our competitors. Since we were a status icon bar, GelBar should be widely accepted by the mass consumer as long as we have an association with high-performance, elite athletes. This reduction in price will make the product available to all types of athletes, not just the elite. The ultimate goal of the pricing strategy is to become like-minded in Gatorade or Powerade, two brands that are synonymous with exercise food.
Careful analysis of the product life cycle and an understanding of what each phase looks like will be key to the successful launch and promotion of GelBar. By utilizing different marketing mix strategies at every stage of the product life cycle, GelBar can stay ahead of the competition and maintain market share. Using every stage of the lifecycle, including retraction, as a way to promote GelBar will appeal to the premium-sports core customer, while at the same time making sure that the product is easily accepted by the mass consumer when we launch the product to a mass segment of the market.