Product life cycle & Marketing

Strategies
By-
Mudit Mathur
CAM III
 Why a product life cycle?
A company’s positioning and differentiation strategy must change
as the product, market, and competitors change over the product
life cycle(PLC)
When we say that a product has a life cycle we assert four things:
i. Products have a limited life.
ii. Products sales pass through distinct stages, each posing different
challenges, opportunities and problems to the seller.
iii.Profits rise and fall at different stages of the product life cycle.
iv.Products require different marketing, financial, manufacturing,
purchasing, and human resource strategies in each life – cycle
stages.
 Product Life Cycle
product life cycle is the course of a product’s
sales and profits over time.
product life cycle(PLC) deals with the life of a
product in the market with respect to business
or commercial costs and sales measures.
The five stages of each product lifecycle are
product development, introduction, growth,
maturity and decline.
 Product Life Cycle
Sales and
Profits Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

Sales and Profits Over the Product’s Lifetime

 Introduction Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Low
Low

Costs
Costs High
High cost
cost per
per customer
customer

Profits
Profits Negative
Negative

Marketing
Marketing Objectives
Objectives Create
Create product
product awareness
awareness and
and trial
trial

Product
Product New
New /Innovative
/Innovative

Price
Price Tend
Tend to
to high
high

Competitors
Competitors Few
Few or
or None
None

Promotion
Promotion Heavy
Heavy to
to entice
entice product
product trial
trial

Distribution
Distribution Build
Build Selective
Selective Distribution
Distribution
 Growth Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Rapidly
Rapidly rising
rising

Costs
Costs Average
Average cost
cost per
per customer
customer

Profits
Profits Rising
Rising

Marketing
Marketing Objectives
Objectives Maximize
Maximize market
market share
share

Product
Product Offer
Offer extension,
extension, service,
service, warranty
warranty

Price
Price Penetration
Penetration strategy
strategy

Competitors
Competitors Growing
Growing in
in number
number

Promotion
Promotion Reduce
Reduce to
to take
take advantage
advantage of
of demand
demand

Distribution
Distribution Build
Build intensive
intensive distribution
distribution
 Maturity Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Peak
Peak

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits High
High

Marketing
Marketing Objectives
Objectives Maximize
Maximize profits
profits while
while defending
defending market
market share
share

Product
Product Diversify
Diversify brand
brand and
and models
models

Price
Price Match
Match or
or best
best competitors
competitors

Customer
Customer Stable
Stable number
number beginning
beginning to
to decline
decline

Promotion
Promotion Increase
Increase to
to encourage
encourage brand
brand switching
switching

Distribution
Distribution Build
Build more
more intensive
intensive distribution
distribution
 Decline Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sales
Sales Declining
Declining

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits Declining
Declining

Marketing
Marketing Objectives
Objectives Reduce
Reduce expenditures
expenditures

Product
Product Phase
Phase out
out weak
weak items
items

Price
Price Cut
Cut price
price

Competitors
Competitors Declining
Declining number
number

Promotion
Promotion Reduce
Reduce to
to minimum
minimum level
level

Distribution
Distribution Go
Go Selective:
Selective: Phase
Phase out
out unprofitable
unprofitable outlet
outlet
Three special categories of PLC
 Four Introductory
Marketing Strategies
Promotion
High Low

Rapid-
Rapid- Slow-
Slow-
High skimming skimming
skimming skimming
strategy
strategy strategy
strategy
Price
Rapid-
Rapid- Slow-
Slow-
Low penetration
penetration penetration
penetration
strategy
strategy strategy
strategy
Marketing strategies for Growth stage
During the growth stage, the firm uses several strategies to sustain
rapid market growth.
 Improves product quality and adds new features and improved
styling.
 Adds new models and flanker products(i.e., products of different
sizes, flavors, and so forth that protect the main product).
 It enters new market segments
 It increases its distribution coverage and enters new distribution
channels.
 It shifts from product- awareness advertising to product-
preference advertising.
 It lowers price to attract the next layer of price – sensitive
buyers.
 Marketing strategies for Maturity
stage
Three potentially useful ways to change the course
for a brand are market, product, and marketing
program modification.
Market Modification
Sales volume = no. of brand users * usage rate per
user.
Expand the no. of brand users
Convert nonusers
Enter new market segments
Attract competitors’ customers
 Continued..
Increase the usage rate among users
Have consumers use the product on more
occasions.
Have consumers use more of the product on each
occasion
Have consumers use the product in new ways.
Product modification
Trying to stimulate sales by modifying the
product’s characteristics through
 Continued..
Quality improvement:
Aims at increasing the product’s functional performance.
Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh
Feature improvement
Aims at adding new features, such as size, weight, materials,
additives, and accessories, that expand the product’s
performance, versatility, safety, or convenience.
Style improvement
Aims at increasing the product’s esthetics appeal.
Eg; New car models, New Coke
 Decline Stage
• Carrying weak product is costly
• Withdraw the product
• Selective niches
• Harvesting
• To establish a system for identifying weak products.
• Some firms’ abandon declining markets earlier than others.
Thank You