Product Life Cycles
Instructor: Safaa S. Y. Dalloul
Principles of MarketingUnit 5
Elements of Lecturehttp://safaadalloul.wordpress.com
Marketing Strategies: Introduction Stage and the Pioneer Advantage
Marketing Strategies: Growth Stage
Marketing Strategies: Maturity Stage
Marketing Strategies: Decline Stage
The Product Life-Cycle Concept: Critique
Product Life Cycle PLC
Product Life-Cycle Marketing
Strategies
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Products Characteristics
Limited life.
Product sales pass through distinct stages
Profits rise and fall.
Products require different strategies.
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Product Life Cyclehttp://safaadalloul.wordpress.com
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Sales grow rapidly when the product is
first introduced and then fall to a
"petrified" level that is sustained by late
adopters buying the product for the first
time and early adopters replacing the
product.
For Example products of small kitchen
appliances such as handheld mixers and
bread makers.
Growth-Slump-Maturity
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The pharmaceutical company aggressively
promotes its new drug, and this produces
the first cycle.
Later, sales start declining and the
company gives the drug another
promotion push, which produces a second
cycle (usually of smaller magnitude and
duration).
Cycle-Recycle
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Sales pass through a succession of life
cycles based on the discovery of new-
product characteristics, uses, or users.
The sales of nylon, for example, show a
scalloped pattern because of the many
new uses parachutes, hosiery, shirts,
carpeting, boat sails, automobile tires—
that continue to be discovered over time.
Scalloped
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Style, Fashion, and Fad
Product Life Cycle
Product Development
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Product development begins when the company finds and
develops a new product idea. During product development,
sales are zero, and the company’s investment cost mount
Introduction Stage and the
Pioneer Advantage
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Product Life Cycle
Introduction Stage
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Why the sales in the introduction stage are slow?
Take time to roll out a new product
Work out the technical problems
Fill dealer pipelines
Gain consumer acceptance
Product Life Cycle
Introduction Stage
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Highest Promotional expenditures to:
Inform potential consumers.
Induce product trial.
Secure distribution in retail outlets.
Product Life Cycle
Pioneer Advantage
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To be first can be rewarding, but risky and expensive
Most studies indicate that the market pioneer gains the
most advantage.
Product Life Cycle
Introduction Stage
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Sales
Costs
Profits
Customers
Competitors
Low sales
High cost per customer
Negative
Innovators
Few
Characteristics
Product Life Cycle
Introduction Stage
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Marketing Objectives Create product awareness and trial
Marketing Objectives
Product Life Cycle
Introduction Stage
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Product
Price
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early adopters and dealers
Strategies
Sales Promotion Use heavy sales promotion to entice trail
Growth Stage
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Product Life Cyclehttp://safaadalloul.wordpress.com
Sales
Costs
Profits
Customers
Competitors
Rapidly rising sales
Average cost per customer
Rising profits
Early Adopters
Growing Number
Growth Stage
Characteristics
Product Life Cyclehttp://safaadalloul.wordpress.com
Marketing Objectives Maximize market share
Growth Stage
Marketing Objectives
Product Life Cyclehttp://safaadalloul.wordpress.com
Product
Price
Offer product extensions, service, warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the mass market
Growth Stage
Strategies
Sales Promotion Reduce to take advantage of heavy consumer demand
Product Life Cycle
Growth Stage
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What are the several strategies that the firm uses to sustain
rapid market growth?
Improves product quality and adds new product features and
improved styling.
Enters new market segments.
Product Life Cycle
Growth Stage
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What are the several strategies that the firm uses to sustain
rapid market growth?
Adds new models and flanker products (i.e., products of
different sizes, flavors, and so forth that protect the main
product).
Increases its distribution coverage and enters new
distribution channels.
Product Life Cycle
Growth Stage
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What are the several strategies that the firm uses to sustain
rapid market growth?
Shifts from product-awareness advertising to product-
preference advertising.
Lowers prices to attract the next layer of price-sensitive buyers.
Maturity Stage
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Product Life Cycle
Maturity Stage
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3 Phases
Stable
Decaying
Growth
The sales growth
rate starts to
decline.
No new distribution
channels to fill.
Sales flatten.
Most potential consumers
have tried the product, and
future sales are governed
by population growth &
replacement demand. The level of sales
starts to decline
Customers begin
switching to other
products
Product Life Cycle
Maturity Stage
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In maturity stage what happen when the sales
slowdown in the industry? And how the
competitors will act? Discuss
Product Life Cycle
Maturity Stage
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Compare between quality, feature,
and style improvement?
Product Life Cyclehttp://safaadalloul.wordpress.com
Maturity Stage
Sales
Costs
Profits
Customers
Competitors
Peak sales
Low cost per customer
High profits
Middle majority
Stable number beginning to decline
Characteristics
Product Life Cyclehttp://safaadalloul.wordpress.com
Maturity Stage
Marketing Objectives Maximize profit while defending market share
Marketing Objectives
Product Life Cyclehttp://safaadalloul.wordpress.com
Maturity Stage
Product
Price
Vary brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
Strategies
Sales Promotion Increase to encourage brand switching
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Decline Stage
Product Life Cyclehttp://safaadalloul.wordpress.com
Decline Stage
Sales
Costs
Profits
Customers
Competitors
Declining sales
Low cost per customer
Declining profits
Laggards
Declining number
Characteristics
Product Life Cyclehttp://safaadalloul.wordpress.com
Decline Stage
Marketing Objectives Reduce expenditure and milk the brand
Marketing Objectives
Product Life Cyclehttp://safaadalloul.wordpress.com
Decline Stage
Product
Price
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitable outlets
Advertising Reduce to level needed to retain hard-core loyal customers
Sales Promotion Reduce to minimal level
Strategies
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Product Life Cycle
Decline Stage
How the company can overcome the decline stage?
Product Life Cycle
Critique | Analysis
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The PLC concept helps marketers
interpret product and market
dynamics.
It can be used for planning and
control, although it is useful as a
forecasting tool.
Advantages
Product Life Cycle
Critique | Analysis
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Product-life-cycle patterns are too
variable in shape and duration.
Marketers can seldom tell what stage the
product is in a product may appear to be
mature when actually it has reached a
plateau prior to another upsurge.
Disadvantages
Note: Critics put those
disadvantages of PLC theory
Homework
List and define the steps in the new-product development process?
Coca-Cola has sustained success in the maturity stage of product life
cycle for many years. Visit Coca-Cola’s website and discuss how
coca-cola has evolved over the years. Identify ways that coca-Cola
can continue to evolve to meet changing consumer need and wants.
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