The Strategy of Regal Marine Company - Essay Example

An innovative company in the boating industry is Regal Marine. Regal Marine uses a product differentiation strategy. The strategy has been very successful for the company. The firm currently has a product line of 22 boats.

The product life cycle of these boats is between three to five years. The product life cycle has four stages: introduction, growth, maturity, and decline. During the introduction, stage sales are low because there are few customers buying the product (Netmba, 2011). The product needs advertising in order to attract new customers. The profits during this stage are nonexistent due to the fact that expenses are high and sales are slow. Regal Marine losses money when new boats are introduced, but eventually if the product survives and stays in the market during its entire product life cycle the firm generates a profit from the model.

The maximum amounts of profits are generated during the growth stage. The growth stage of the product life cycle is considered a period of rapid market acceptance and substantial profit improvement (Kotler, 2003). Regal Marine should produce a lot of units during this stage. Investments made in advertising during this stage have a high return. The third stage of the product life cycle is the maturity stage. Competition is high during this stage which causes sales to decline (Valuebasedmanagement, 2011).

The firm should lower its advertising expenses during this stage because the product is well known. The final stage, declining, is a period of downward sales and eroding profits. At the end of the declining stage, the model of the boat is taken off the market. 

The input received from these sources can be used to alter the design of the new boats. It is important to realize market research about the customer’s expectations and desires. Companies that listen to their customers are able to satisfy them. The customer is the most important stakeholder group due to the fact that they provide the sales of the firm. The CAD system has made the development process faster. The company can design and bring a new product to the market at greater speeds due to the CAD system.

Another strategy that is being used by the company as a consequence of its use of CAD technology is involving the suppliers in the design process. The quality, performance, and efficiency of the boats the firm produces have improved due to its use of CAD technology in the manufacturing process.