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Product Life Cycle

Evaluation of Media: Television and Radio

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14 views16 pages

Product Life Cycle

Evaluation of Media: Television and Radio

Uploaded by

anhhvt22
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Product Life Cycle

Outline
1. Product life cycle stages: characteristics and strategies
2. Life Cycle Strategies
Product life cycle
Product Development
• Product development begins when the company finds
and develops a new-product idea.
• Sales are zero and investment costs mount
Introduction Stage
• Introduction is a period of slow sales growth as the product
is introduced in the market. Profits are nonexistent in this
stage because of the heavy expenses of product
introduction.
• Characteristics:
- Low sales
- High cost per customer
- Negative profit
- A few competitors
- Main customers are innovators.
Introduction Stage
• Marketing Objectives: Create product awareness and trial
• Strategies:
- Product: offer a basic product
- Price: use cost-plus
- Distribution: build selective distribution
- Advertising & Promotion: Build product awareness among early adopters and dealers. Use heavy sales
promotion to encourage product trial.
Growth Stage
• Growth is a period of rapid market acceptance and increasing profits.
• Characteristics:
- Rapidly rising sales
- Average cost per customer
- Rising profit
- Main customers are early adopters
- Growing number of competitors
Growth Stage
• Marketing Objectives: Maximize market share
• Marketing mix Strategies:
- Product: Offer product extensions, service, warranty
- Price: Price to penetrate market
- Distribution: Build intensive distribution
- Advertising & Promotion: Build awareness and interest in the mass market. Reduce sales promotion to take advantage
of heavy consumer demand.
Maturity Stage
• Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers.
Profits level off or decline because of increased marketing outlays to defend the product against competition.
• Characteristics:
- Peak sales
- Low cost per customer
- High profit
- Main customers are middle majority
- Stable number of competitors and begin to decline
Maturity Stage
• Marketing objectives: Maximize profit while defending market share
• Marketing Mix Strategies:
- Product: diversify brand and models
- Price: price to match or beat competitors
- Distribution: Build more intensive distribution
- Advertising and Promotion: Emphasize brand differences and benefits (competitive advantages). Increase sales
promotion to encourage brand switching
Maturity Stage Modifying
Strategies
• Market
modifying
• Product
modifying
• Marketing mix
modifying
Decline stage
• Decline is the period when sales fall off and profits drop.
• Characteristics:
- Declining sales
- Low cost per customer
- Declining profits
- Main customers are laggards
- Declining number of competitors
Decline stage
• Marketing objectives: Reduce expenditure and milk the brand
• Marketing Mix Strategies:
- Product: Phase out weak items
- Price: Cut price
- Distribution: Go selective, phase out unprofitable outlets
- Advertising & Promotion: Reduce to level-needed to retain hard-core loyals. Reduce sales promotion to minimum level.
Decline Stage Strategies

• Maintain the product: maintain its brand,


repositioning or reinvigorating it in hopes of
moving it back into the growth stage of the PLC.
• Harvest the product: reducing various costs
(plant and equipment, maintenance, R&D,
advertising, sales force), hoping that sales hold
up.
• Drop the product: drop the product from its line.
It can sell it to another firm or simply liquidate it
at salvage value.
Life Cycle Strategies

Style

Fashion

Fad

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