Many products have life cycles that fit into a set pattern of Introduction, Growth, Maturity and Decline stages -- also called phases by marketing theorists. The growth stage, as the name implies, is the period when the rate of sales growth for the product accelerates. The small business owner and his marketing staff seek to create and implement strategies that will extend the growth stage as long as possible, which often requires finding ways of dealing with new competitors that inevitably enter the market.

Develop word-of-mouth recommendations for the product. The first people to try a new product are called early adopters. Encourage satisfied early adopter customers to tell their friends, family and business colleagues to try the product. Use their influence to bring those customers to you who may normally be reluctant to be among the first to try something new. Offer rewards to stimulate word-of-mouth promotion, such as discount coupons and small gifts, to customers who bring in other customers.

Step up the advertising budget. The growth stage is your opportunity to gain sales momentum and build market share, which will require expenditures for advertising. Make sure you research which media will work best for your particular product. Test market the message you want to deliver to customers and measure its effectiveness before you commit to a large, more expensive ad campaign.

Build customer loyalty. During the growth stage you may have a window of opportunity to build market share before competitors and copycats gain visibility. Emphasize superior customer service to build customer satisfaction -- and loyalty -- to the point where it will be difficult for competitors to take customers from you, even with the promise of lower prices.

Encourage existing customers to purchase the product in larger quantities. When a customer makes a purchase, give her a coupon for a 2 for 1 discount on her next purchase. You can afford to offer the discount because there is no advertising cost involved in making a second sale -- you have already brought her into your store. If possible, show alternative uses of the product that will encourage the customer to buy additional units.

Extend the growth stage by making changes to the product to add benefits that you can showcase with your advertising and promotion campaign. Adding benefits allows you to continually build your competitive advantage in the minds of current and potential customers. In your marketing communications, stress why your product is clearly superior to those of competitors.

Tip

Competitors entering your market may not pose as serious a threat as you feared. Their marketing expenditures on advertising and promotion will have the effect of raising customer awareness for all the products in its class -- including yours. New competitors are also proof that other business owners agree with your assessment that the market is robust and will continue to grow in the foreseeable future.

During the growth stage as your sales accelerate, per unit cost will decline because overhead costs such as rent and utilities are spread over a larger number of units. These profits give you extra cash to increase your marketing expenditures even further.

Warning

Despite the creative marketing strategies you employ, the product may enter a maturity phase when sales growth begins to slow down. This doesn’t mean the product will not be profitable -- it does mean that you should implement strategies to improve production and distribution efficiencies to lower costs. This will allow you to maintain profitability as sales growth declines.