Product Life Cycle

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PRODUCT LINE

Transcript of Product Life Cycle

Page 1: Product Life Cycle

PRODUCT LINE

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PRODUCT LINE

A group of products clubbed together by virtue of satisfying a particular class of needs or distributed through the same channel or possessing common physical and technical characteristics.

Dabur - Food, Shampoo, Hair oil

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PRODUCT LINE ANALYSIS

• Product lining is the marketing strategy of offering for sale several related products.

• Line depth refers to the number of product variants in a line.

• Line consistency refers to how closely related the products that make up the line are.

• Line vulnerability refers to the percentage of sales or profits that are derived from only a few products in the line.

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PRODUCT LINE- STRETCHING DECISIONS

New Products

Present Products

H H

HHH

H

Pri

ce

Pri

ce

Pri

ce

LL L L

L LQuality QualityQuality

New Products

New Products

New Products

Present Products

Present Products

Downward Stretch Upward Stretch Two-way Stretch

Nescafe MaruthiTitan

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Product Mix

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PRODUCT MIX

A Product mix is the set of all products and items a particular seller offers for Sale. Eg :- Dabur

Components are •The Width of a product mix refers to how many different product lines the company carries.•The Length of a product mix refers to the total number of items in the mix.•The Depth of a product mix refers to how many variants are offered of each product in the line.•The Consistency is the degree to which product lines are related

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Length And Width

Hair Oils Shampoo Oral Care Skin care Health Supplements

Dabur Amla Hair Oil

Dabur Vatika Shampoo

Dabur Red Toothpaste

Gulabari Skin Care

Dabur Chyawanprash

Vatika Hair Oil

Babool Toothpaste

Dabur Uveda

Dabur Honey

Dabur Anmol

Promise Dabur Glucose

Meswak

Hair Oils Shampoo

Oral Care

Skin care

Health Supplements

Dabur Amla Hair Oil

Dabur Vatika Shampoo

Dabur Red Toothpaste

Gulabari Skin Care

Dabur Chyawanprash

Vatika Hair Oil

Babool Toothpaste

Dabur Uveda

Dabur Honey

Dabur Anmol

Promise Dabur Glucose

Meswak

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CONSISTENCY

• The Consistency is the degree to which product lines are related

• It also refers to how closely related the various product lines are in end use, production requirements, distribution channels, or in some other way.

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PRODUCT LIFE CYCLE

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ORIGIN

THE idea of the Product Life Cycle was first developed in 1965 by Theodore Levitt in an article entitled “Exploit the Product Life Cycle” published in the Harvard Business Review on 1 November 1965.

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INTRODUCTION

All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market,

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PRODUCT LIFE CYCLE

The “Product Life Cycle” is the name given to the stages through which a product passes over time. The classic Product Life Cycle has four stages:

1. Product development

2. Introduction

3. Growth

4. Maturity

5. Decline

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Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. As the product progresses through its life cycle, changes in the marketing mix usually are required in order to adjust to the evolving challenges and opportunities

Product Development Stage

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INTRODUCTION STAGE

At the market introduction stage the size of the market, sales volumes and sales growth are small. A product will also normally be subject to little or no competition. The primary goal in the introduction stage is to establish a market and build consumer demand for the product.

During the introduction stage, the primary goal is to establish a market and build primary demand for the product class.

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GROWTH STAGE

The growth stage is a period of rapid revenue growth. Sales increase as more customers become aware of the product and its benefits and additional market segments are targeted. During the growth stage, the goal is to gain consumer preference and

increase sales.

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Maturity StageThe maturity stage is the most profitable. While sales continue to increase into this stage, they do so at a slower pace. Because brand awareness is strong, advertising expenditures will be reduced. Competition may result in decreased market share and/or prices. The competing products may be very similar at this point, increasing the difficulty of the product. The firm places effort into encouraging competitors' customers to switch, increasing usage per customer, and converting non-users into customers. Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products. During the maturity stage, the primary goal is to maintain market share and extend the product life cycle.

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Decline Stage Eventually sales begin to decline as the market becomes saturated, the

product becomes technologically obsolete, or customer tastes change. If the product has developed brand

loyalty, the profitability may be maintained longer. Unit costs may increase with the declining production volumes and eventually no more profit can be made. During the decline phase, the firm generally has three options:

a) Maintain the product in hopes that competitors will exit. Reduce costs and find new uses for the product.

b) · Harvest it, reducing marketing support and coasting along until no more profit can be made.

c) · Discontinue the product when no more profit can be made or there is a successor product.

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Development phase

Introduction phase

Growth phase Maturity phase

Decline phase

Product Limited no. of variations

Introduction of product variation & models

improvement upgrade of product

Price decrease Models that are not profitable withdrown

Price High sales to middle man

Aggressive price policy for sales increase

Re-estimation of price policy

Defensive price policy

Maintain price level for small profit

Promotion Creation of public market product awareness

Reinforcement of product awareness & performance

Reinforcement of middle man

Maintain loyal to middle man

Gradual decrease

Distribution Through certain distribution channels

Distribution through all channels available

Distribution with good supply but with low margins of profit

Distribution with good supply but with low margins of profit

Withdrawal from most distribution channel