Product life cycle & Marketing Strategies

BYMudit 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 Profits Time Decline Sales

Product Development

Introduction

Growth

Maturity

Sales and Profits Over the Product¶s Lifetime

Summary of Characteristics, Objectives, & Strategies
Sale Co t Profit Marketing Objective Product Price Competitor Promotion Di tribution Low High co t per cu tomer Negative Create product awarene New /Innovative Tend to high Few or None Heavy to entice product trial Build Selective Di tribution and trial

Introduction Stage of the PLC

Growth Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sale Co t Profit Marketing Objective Product Price Competitor Promotion Di tribution Rapidly ri ing Average co t per cu tomer Ri ing Maximize market hare Offer exten ion, ervice, warranty Penetration trategy Growing in number Reduce to take advantage of demand Build inten ive di tribution

Maturity Stage of the PLC
Summary of Characteristics, Objectives, & Strategies
Sale Co t Profit Marketing Objective Product Price Cu tomer Promotion Di tribution Peak Low co t per cu tomer High Maximize profit while defending market hare Diver ify brand and model Match or be t competitor Stable number beginning to decline Increa e to encourage brand witching Build more inten ive di tribution

Summary of Characteristics, Objectives, & Strategies
Sale Co t Profit Marketing Objective Product Price Competitor Promotion Di tribution Declining Low co t per cu tomer Declining
Reduce expenditure

Decline Stage of the PLC

Pha e out weak item Cut price
Declining number Reduce to minimum level

Go Selective: Pha e out unprofitable outlet

Three special categories of PLC

Four Introductory Marketing Strategies
Promotion
High High RapidRapidskimming strategy Low SlowSlowskimming strategy

Price
Low RapidRapidpenetration strategy SlowSlowpenetration 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 productpreference 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

Sign up to vote on this title
UsefulNot useful