product life cycle & marketing strategies[1]

8/6/2019 Product Life Cycle & Marketing Strategies[1]

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Product life cycle &

Marketing Strategies

BY-DR. VEENA TEWARI


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Why a product life cycle?

A companys positioning and differentiation strategy must

change as the product, market, and competitors change

over theproduct 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 lifecycle.

iv. Products require different marketing, financial,

manufacturing, purchasing, and human resource

strategies in each life cycle stages.


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Product Life Cycle

product life cycle is the course of aproducts

sales and profits over time.

product life cycle(PLC) deals with the life ofa 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.


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Time

ProductDevelop-ment

Introduction

Profits

Sales

Growth Maturity Decline

Sales andProfits

Sales and Profits Over the Products Lifetime

Product Life Cycle


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Sale

Sale

Co t

Co t

Profit

Profit

Marketing Objective

Marketing Objective

Product

Product

Price

Price

Low

Low

High co t per cu tomer

High co t per cu tomer

Negative

Negative

Create product awarene and trial

Create product awarene and trial

Offer a ba ic product

Offer a ba ic product

U e co t-plu formula

U e co t-plu formula

Di tribution

Di tribution Build elective di tribution

Build elective di tribution

Promotion

Promotion Heavy to entice product trial

Heavy to entice product trial

Summary ofCharacteristics, Objectives, & Strategies

Introduction Stage of the PLC


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Sale

Sale

Co t

Co t

Profit

Profit

Marketing Objective

Marketing Objective

Product

Product

Price

Price

Rapidly ri ing

Rapidly ri ing

Average co t per cu tomer

Average co t per cu tomer

Ri ing

Ri ing

Maximize market hare

Maximize market hare

Offer exten ion, ervice, warranty

Offer exten ion, ervice, warranty

Penetration trategy

Penetration trategy

Di tribution

Di tribution Build inten ive di tribution

Build inten ive di tribution

Promotion

Promotion Reduce to take advantage of demand

Reduce to take advantage of demand


Growth Stage of the PLC


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SaleSale

Co tCo t

ProfitProfit

Marketing ObjectiveMarketing Objective

ProductProduct

PricePrice

PeakPeak

Low co t per cu tomerLow co t per cu tomer

HighHigh

Maximize profit while defending market hareMaximize profit while defending market hare

Diver ify brand and modelDiver ify brand and model

Match or be t competitorMatch or be t competitor

Di tributionDi tribution Build more inten ive di tributionBuild more inten ive di tribution

PromotionPromotion Increa e to encourage brand witchingIncrea e to encourage brand witching


Maturity Stage of the PLC


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SaleSale

Co tCo t

ProfitProfit

Marketing ObjectiveMarketing Objective

ProductProduct

PricePrice

DecliningDeclining

Low co t per cu tomerLow co t per cu tomer

DecliningDeclining

Reduce expenditure and milk the brandReduce expenditure and milk the brand

Pha e out weak itemPha e out weak item

Cut priceCut price

Di tributionDi tribution Selective: pha e out unprofitable outletSelective: pha e out unprofitable outlet

PromotionPromotion Reduce to minimum levelReduce to minimum level


Decline Stage of the PLC


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Three special categories of

PLC


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Continued

A Style is a basic and distinctive mode of expression

appearing in a field of human endeavor.Styles

appear in homes, clothing, art etc.

AFashion is a currently accepted or popular style ina given field. Fashion pass through four stages:

Distinctiveness, emulation, mass fashion, decline.

Fads are fashions that comes quickly into public

view , are adopted with great zeal, peak early, anddecline very fast.


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Four Introductory

Marketing Strategies

RapidRapid--skimmingskimming

strategystrategy

RapidRapid--penetrationpenetration

strategystrategy

SlowSlow--penetrationpenetration

strategystrategy

SlowSlow--skimmingskimming

strategystrategy

PricePrice

LowLow

HighHigh

PromotionPromotionHighHigh LowLow


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Marketing strategies for Growth stage

During the growth stage, the firm uses several strategies tosustain rapid market growth.

Improves product quality and adds new features and

improved styling.

Adds new models and flanker products(i.e., products ofdifferent sizes, flavors, and so forth that protect the main

product).

It enters new market segments

It increases its distribution coverage and enters newdistribution channels.

It shifts from product- awareness advertising to product-

preference advertising.

It lowers price to attract the next layer of price sensitive

buyers.


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Marketing strategies for Maturity

stage

Three potentially useful ways to change the course

for a brand are market, product, and marketing

program modification.

Market ModificationSales volume = no. of brand users * usage rate per

user.

Expand the no. of brand users

Convert nonusers

Enter new market segments

Attract competitors customers


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Continued..

Increase the usage rate among users

Have consumers use the product on more

occasions.

Have consumers use more of the product on eachoccasion

Have consumers use the product in new ways.

Product modification

Trying to stimulate sales by modifying theproducts characteristics through


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Continued..

Quality improvement:

Aims at increasing the products 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 products

performance, versatility, safety, or convenience.

Style improvement

Aims at increasing the products esthetics appeal.Eg; New car models, New Coke.


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DeclineS

tage Increase investment

Resolve uncertainties - stable investment

Selective niches Harvesting

Divesting

To establish a system for identifying weak products.

Some firms abandon declining markets earlier than others.


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Thank You

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