1. What stage in the product life cycle was GE in with their Profile and Monogram brands?
2. What did GE do to extend the growth cycle of these brands?
3. Why did this strategy work?
4. Do you think GE is still incorporating this strategy? Do some research to support your answer.
Several years ago, GE's Appliance subsidiary was at a crossroads. Industry pricing was decreasing due to the influence of several Macro Environmental factors. General Electric had to make a choice: either to continue to see their margins diminish or to reconsider their marketing strategy. GE was at the maturity stage in the product life cycle with their lines of appliances. Rather than continue to see margins decline, they decided to reposition the brand via new product innovation.
"Consumers are willing to step up and buy higher end products, to spend more for appliances if you can appeal to their aspirations at a more emotional level," says Dave McCalpin, Chief Marketing Officer for GE.
Consumers are now interested in trendy appliances and are completing kitchen renovations which will include a complete replacement of all of their kitchen appliances!
Profile and Monogram are two brands which GE repositioned in the consumer's mind to take advantage of this new opportunity. This repositioning modified the marketing mix; it allowed GE to charge more for these products due to the product innovation they incorporated into their product development strategy.
However, strategy doesn't end with product innovation and repositioning. General Electric also ensures it limits distribution chain partners (retailers) which have access to the brands as well, in a sense making these almost a specialty product rather than a shopping good (one might argue). Consumers' perceptions changed to accept the repositioning of both brands; GE's strategy worked! Since these strategy changes have been implemented, GE has seen substantial growth with both brands and has become an industry leader in this niche market segment.