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Stages of Product Life Cycle - POM Assignment by Muskaan Chhabra

Muskaan Chhabra submitted a report on the product life cycle stages using the example of Apple's iPod. The four stages are: 1) Introduction from 2001-2002 when iPod gained popularity. 2) Growth from 2003-2007 as competitors emerged but iPod maintained market share through new models. 3) Maturity from 2008 when sales peaked at 54.8 million units. 4) Decline from 2014 as iPod sales decreased and the iPhone cannibalized the market.

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163 views5 pages

Stages of Product Life Cycle - POM Assignment by Muskaan Chhabra

Muskaan Chhabra submitted a report on the product life cycle stages using the example of Apple's iPod. The four stages are: 1) Introduction from 2001-2002 when iPod gained popularity. 2) Growth from 2003-2007 as competitors emerged but iPod maintained market share through new models. 3) Maturity from 2008 when sales peaked at 54.8 million units. 4) Decline from 2014 as iPod sales decreased and the iPhone cannibalized the market.

Uploaded by

Muskaan Chhabra
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Name- Muskaan Chhabra

Course- BBA 3C
Batch- 2020-2023
Enrolment Number- A1810420022
Subject- Principles of Marketing- II
Topic- Stages in Product Life Cycle
Submitted To-
Mr. Aditya Kumar Gupta
PRODUCT LIFE CYCLE

The term product life cycle refers to the length of time a product is introduced
to consumers into the market until it's removed from the shelves. The life cycle
of a product is broken into four stages— introduction, growth, maturity, and
decline.
Let’s discuss all the four stages of a product with the example of Apple iPod

Apple’s first iPod


1. Introduction Stage- Brands and their product life cycle actually
commence in the public's eye during the introduction stage. During the
introduction stage, companies heavily advertise their brands and
products; and execute trade show and in-store promotions for potential
wholesale and retail customers, respectively. Company advertising is
mainly focused on building brand awareness. Companies usually price
their brands relatively high during the introduction stage to recoup some
of their development costs. Competition is low or non-existent during
this stage. Thus, a successful brand concept will usually elicit heavy
sales and propel the brand toward the growth stage.

The introduction phase of the iPod only lasted from December 2001
through about March 2002. The iPod blew all their competitors away with its
“cool” factor, advanced technical capabilities, click-wheel control and soon-to-
be unmistakable white headphones. Through its awareness objectives and to
build reputation as a credible brand, informative television advertising was
used to demonstrate the product’s usage and emphasise the benefit of
listening to music on-the-go. In March 2002, Apple introduced a 10-Gbyte
iPod, which was enough for 2000 songs. This new development moved the
iPod into the growth stage.

2. Growth Stage- Brands enter the growth stage of the product life cycle
when sales start growing exponentially. Brand managers may increase
distribution during the growth stage to further enhance sales. A
company may also improve the quality of their product brands, adding
various flavours or features. Because of the success of one or more
companies, more competitors will enter the market with their own
brands. Consequently, some competitors may try to lower prices to gain
marketing share. With a growing number of customers seeking the
product, more distribution channels are needed. Mass marketing and
other promotional strategies to reach more customers and segments
start to make sense for consumer-focused markets during the growth
stage. The primary challenges during the growth phase are to identify a
differentiated position in the market that allows the product to capture a
significant portion of the demand and to manage distribution to meet the
demand.

Despite the launch of the iTunes Music Store in 2003 and hardware
progressions fuelling the creation of second and third generation iPods,
unsurprisingly, Apple was facing growing competition that targeted its
features and size. The MP3 player had become the fastest growing
consumer electronic product ever introduced and was rapidly gaining
market acceptance. The ‘innovator’ market was reaching saturation, so
an expanded product line was becoming crucial. Consequently, Apple
sought to broaden its market appeal in 2004 with the launch of the iPod
Mini and this became highly popular with teenagers and women due to
its range of colours, smaller size and reduced price. Over the next three
years, as typical of the growth stage, iPod Nano, Shuffle and Touch
product extensions were launched to stave off competition from ‘me-too
products’; including the likes of Samsung, with its YP-P2 touchscreen
MP3 player, and Microsoft’s Zune. In addition to the arrival of Apple
Stores to the UK in 2004, distribution channels were further expanded
beyond electrical stores to include supermarkets such as Tesco (in
2005). Apple’s commitment to the iPod range was demonstrated in
devoting 60% of total advertising spend to product line, in support of the
memorable silhouette figures TV, print and outdoor campaign – helping
Apple to a mammoth 72.7% MP3 player market share in 2007.

3. Maturity Stage- Because of increased competition, a company's brands


will eventually reach the maturity stage of the product life cycle. During
this stage, competition for market share may be fierce. New competitors
will often have trouble successfully entering the market as market
potential is limited. A company will often need to differentiate the brand
of products toward a specific segment. In the maturity stage, marketers
often focus on niche markets, using promotional strategies, messaging,
and tactics designed to capture new share in these markets. Since
there is no new growth, the emphasis shifts from drawing new
customers to the market to winning more of the existing market. Often,
distribution partners will reduce their emphasis on mature products.

By 2008, the iPod can be said to have reached maturity with global
sales peaking at 54.8m units. With each new iPod generation, Apple
continually broke new ground in design and performance, including the
introduction of colour screens, camera/video, Nike+ functionality and
increased battery life – to name just a few few. Furthermore, the
seamless ecosystem integration of the iPod with Mac PC, Apple TV and
iCloud creates switching costs for consumers to justify a price premium.

4. Decline Stage-  The decline stage is where sales start to fall for a
company's product brands. At this point, it is still possible to extend the
life of the product by finding new markets for the brand like international
markets; or even finding additional uses by repositioning the brand.
Ultimately, a brand may need to be sold or gradually discontinued if it is
no longer profitable.
In early 2014, Tim Cook, Apple CEO, said “I think all of us have known
for some time that the iPod is a declining business”. Given the peak
global sales in 2008, by 2013, this had dropped significantly to 26.3m;
despite new generations of the iPod Touch and Nano launched in 2012.
Whilst the decline stage of the PLC is generally characterised by price
discounts, the iPod is somewhat unconventional in that it maintains a
premium pricing strategy to protect Apple’s brand image.

The iPod offers a prime example of the


ever-shortening Product Lifecycle in today’s age of rapid technological
development. When companies talk about “cannibalizing” their market,
they mean that one product takes market share from another. In effect,
one of the company’s products is eating the other product’s market
share. Each new model of the iPod took market share from its
predecessors, but collectively the iPod products dominated their market.
The greatest cannibal of all in the Apple story is the iPhone, which
was first released in June 2007.

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