The paper “ Potential of Future Success of Smart Wallet Product due to Intense Market Research, Sustainability of the Product and Plastic Materials” is an outstanding example of a case study on marketing. In growth strategy, the company substantially widens the scope of one or more of its business in terms of their respective customer groups, customer functions, and alternative technologies to improve the overall performance. A market penetration strategy is considered for the smart wallet product. In this strategy, the company seeks to expand sales of the smart wallet product. Its objective is to increase sales and market share for the product.
Aggressive pricing is a very common tactic for market penetration strategy. It involves lowering the price of the smart wallet than that of competing products. The innovation or product life cycle diagram below describes this strategy. Fig1: The innovation life cycle of smart wallet The above innovation life cycle model shows the market adoption of the smart wallet. At the beginning of the s-curve, the smart wallet product is introduced into the new market, and there are early adopters who are interested in testing the new product.
At this stage there typically small or no market leading to low sales. The company invests more in market research and product promotion to achieve a demand that leads to the success of the smart wallet. There is limited competition in the market making it an advantage to the company. Since it is a new product being launched, the company sets a high price that will finally become the average market price. The growth stage of the smart wallet follows, and the company establishes the product's position in the market.
The demand increases and due to price penetration, a mass-market adoption is acquired and leads to an increase in sales. This is also due to improved technology in production, reduced cost of production cost and distribution of standardized smart wallet. As the demand increases, the competition also increases as new companies find to benefit from the new and developing markets. At this stage, a more sophisticated market approach is used since the product is already established and is no longer new in the market.
However, the company increases profits at this stage due to lower costs and increase sales. From this point, market matures, and this is when the late adopters who were opposing to "risk" start buying the tried and solutions. Profits start to decrease at this maturity stage since they are shared among many competitors. The production continues to reduce as the new s-curve are breakthrough innovations of the smart wallet driven by the company producing high product volume. At the decline stage, the market of the smart wallet declines. Consumers will stop purchasing the product in favor of other new and cheaper products.
The company can prevent this by advancing technology and producing smart wallets with new features. This is represented by new s-curve in the innovation life cycle diagram above. Kaplan (2012) shows that the strategy targets either differentiation or cost leadership. The product is based on differentiation since the industry targets customers in all segments based on attributes other than the price i. e. high product quality. The company is trying to distinguish itself along with these scopes' positive relation to its competition. It finds how to minimize costs in parts that do not distinguish it, to remain cost-competitive.
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