10 Chapter II Literature Review II.1 Theoretical Foundation II.1.1 Marketing Definition Marketing is a social process that encompasses the activities undertaken by individuals and groups to identify, anticipate, and satisfy customer needs and wants through the creation, offering, and exchange of products and services of value (Kotler, 2012). Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (American Marketing Association, 2021). II.1.2 Brand and Branding Strategy The concept of "brands" stands as a cornerstone of differentiation and recognition. According to the American Marketing Association, a brand encompasses a multifaceted identity, ranging from a mere name or symbol to an intricate combination of elements, all designed with a singular purpose - to distinguish the goods or services of one seller or group of sellers from those offered by competitors. These distinctions, in turn, extend beyond the mere physical attributes of a product or service, delving into the realm of symbolism, emotion, and intangibles that shape consumer perception (Kottler, 2016). Brand function for consumer role as vehicles for setting and managing consumer expectations while simultaneously mitigating perceived risks. In exchange for customer loyalty, firms pledge to consistently deliver a positive, predictable experience, along with desirable benefits through their products and services. Brands, in essence, become the compass by which consumers navigate their choices. Brands also serve as expressions of who they are or aspire to be. In certain cases, brands even acquire human- like characteristics, fostering unique relationships between consumers and the brands they cherish (Kottler, 2016). Branding is the process of endowing products and services with the power of a brand. It’s all about creating differences between products. Marketers need to teach consumers “who” the product is—by giving it a name and other brand elements to identify it—as well as what the product does and why consumers should care. Branding creates mental structures that help consumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides 11 value to the firm. For branding strategies to be successful and brand value to be created, consumers must be convinced there are meaningful differences among brands in the product or service category. Brand differences often relate to attributes or benefits of the product itself (Kottler, 2016). The brand name of your product line should reflect the line's specific value proposition. It provides the customer with an easily identified theme or connection between your products and will increase product or brand recognition. With recognition, repeat customers and sales will increase. II.1.2 Product Lifecycle The product lifecycle is a fundamental concept in marketing and business strategy, depicting the stages a product undergoes from its inception to its eventual decline and withdrawal from the market. It's a theoretical framework that aids businesses in managing a product's trajectory in market. Based on Kotler et al (2016), “product life cycle (PLC) is the course of a product’s sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity and decline”. The stages generally : • Introduction Phase: This marks the initial launch of the product into the market. During this phase, extensive research and development precede the product's introduction. Sales typically start at a slow pace as consumer awareness and acceptance are cultivated. Marketing efforts are focused on educating the market about the product's features and benefits. • Growth Phase: As consumer acceptance and demand increase, the product enters the growth phase. Sales escalate rapidly as more customers adopt the product. During this phase, companies often refine the product, introduce variations or upgrades, and expand distribution channels to cater to growing demand. • Maturity Phase: At this stage, the product experiences its peak in sales volume. Market saturation becomes apparent as the product reaches widespread acceptance. Intense competition arises as other companies introduce similar products. Marketing efforts now focus on maintaining market share through competitive pricing, promotional strategies, and product differentiation. • Decline Phase: In this final stage, the product encounters a decline in sales. Various factors contribute to this decline, including technological advancements, shifts in 12 consumer preferences, or the emergence of superior alternatives. Companies might decide to phase out the product, redirect resources to newer offerings, or attempt to revitalize it through rebranding or adding new features. Figure 2.1 Product Life Cyle Characteristics Understanding the product lifecycle is crucial for businesses as it enables them to forecast and plan strategies for each stage. For instance, during the growth phase, companies might invest heavily in scaling production and expanding market reach, while in the maturity phase, they may focus on cost optimization and diversification. Ultimately, comprehending these stages aids in effective decision-making regarding product innovation, marketing strategies, and resource allocation throughout a product's lifecycle. (Pruitt & Grudin, 2003). II.1.3 Product Lifecycle in Marketing (Basic, Fashion and Fad Products) Apparel and various consumer goods can be categorized based on the duration of their market relevance. Essential products, such as basic T-shirts and blue jeans, maintain consistent sales over extended periods with minimal style alterations. Businesses offering essential products typically enjoy prolonged product lifecycles, with repeat purchases from loyal customers over time. Fashion products have shorter lifecycles compared to Basic product. Defined by contemporary styles, trends attract a significant following for a limited period. Once a trend loses its popularity among the masses, its lifecycle concludes abruptly, often experiencing a rapid decline in sales. The Fads exhibit the briefest lifecycle among the three categories. These are styles embraced momentarily by specific subcultures or younger demographics before fading away quickly. In terms of overall sales volume, Basic products typically outperform trendy and fad items, boasting longer lifecycles.