Professional Documents
Culture Documents
Introduction
Growth
Maturity
Decline
Sales
Profits Time
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The fact that products have a life cycle imply the following:
The products have a limited life, Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Profits rise and fall at different stages of product life cycle. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.
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Product branding & quality level is established, and intellectual property protection such as patents & trademarks are obtained (if its a new product). Price skimming may be used if the product is a new development & there are no competitors. Or pricing may be low penetration pricing to build market share rapidly. Informative advertising is used until the product becomes known. Promotion is aimed at innovators & early adopters. Limited product availability in few outlets/locations.
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Product quality is maintained & additional features & support services may be added. Price is reduced a little as new competitors have entered. Promotion is focused on building the brand. Advertising is changed to persuasive advertising to encourage brand loyalty. Distribution channels are added as demand increases & customers accept the product.
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Product- features may be enhanced to differentiate the product from that of competitors. Price- competitive pricing or promotional pricing is used & there are a lot of price wars. Place- distribution becomes more intensive & incentives may be offered to encourage preference over competing products. Promotion- emphasizes product differentiation. A lot of persuasive advertising is done. Many different approaches are used as appropriate to the product. Sales promotion tools like premiums, discounts, coupons, cash rebates, "free" goods, specialty advertising, 7 and demonstrations are used.
Maintain the product- possibly rejuvenating it by adding new features & finding new uses. Harvest the product- reduce costs & continue to offer it, probably to a loyal niche segment. Discontinue the product- liquidating remaining inventory or selling to another firm that is willing to continue the product.
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Introduce new variations of the original product, e.g. a childrens version Use a new advertising campaign Sell into new markets, e.g. export the product to another country Introduce a new, improved version of the product Sell through additional, different retail outlets Modify the 'augmented product'. Services can be added where none existed before -- adding free set-up and delivery are good examples.
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Introduction
Growth
Maturity
Decline
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