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8th Class (Product Life-Cycle Process (The Product life cycle concept can…
8th Class
Product Life-Cycle Process
The Typical Product Life Cycle (PLC) Has 5 Stages
Product Development, Introduction, Growth, Maturity and Decline
Not all products follow this cycle
Fads, Styles And Fashion
The Product life cycle concept can be applied to a
:red_flag:(
Red flags link the product
)
Product class (Soft Dink)
Product form (Diet Cola)
Brand ( Diet Dr. Pepper)
Product Life-Cycle Strategies
PLC Stages
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Red flags link the product
)
Product development
Sales are zero
Investments costs are high
Begins when the company develops a new-product idea
Profits are negative
Introduction
Low sales
High cost per customers acquired
Negative profits
innovators are targeted
Little competition
Growth
Average cost per customer
Rapidly rising sales
Rising profits
Growing Competition
Early adopters are targeted
Maturity
Sales peak
Low cost per customer
High profits
Middle majority are targeted
Competition begins to decline
Decline
Declining profits
Laggards are targetted
Declining competition
Low cost per customer
Declining Sales
Marketing Strategies
:red_flag:(
Red flags link the product
)
Introduction Sage
Distribution
-
Build selective distribution
Advertising
-
Build awareness among early adopters and dealers/re-sellers
Price
-
Use cost-plus basis to set
Sales Promotion
-
Heavy expenditures to create trail
Product
-
Offer a basic Product
Growth Stage
Product
-
Offers product extensions, service, warranty
Price
-
Penetration pricing
Distribution
-
Build intensive distribution
Adverting
-
Build awareness and interest in the mass market
Sales Promotion
-
Reduce expenditures to take advantages of consumer demand
Maturity Stages
Product
-
Diversify brand and models
Price
-
Set to match or beat competition
Distribution
-
Build more intensive distribution
Advertising
-
Stress brand differences and benefits
Sales Promotion
-
Increase to encourage brand switching
Decline Stage
Distribution
-
Use selective distribution: phase out unprofitable outlets
Advertising
-
Reduce to Level needed to retain hard-core loyalists
Sales Promotion
-
Reduce to minimal level
Product
-
Phase out weak items
Price
-
Cut price
Major Stages in New Product Development
New Product Development Strategy/Progress
Step 4: Marketing Strategy Development
Strategy statements describe
Step 5: Business Analysis
Sales, Cost and Profit projections
Step 3: Concept Development and Testing
Product concepts provide detailed versions of new product ideas.
Consumers evaluate ideas in concept tests
Step 6: Product Development
Prototype development and testing
Stage 2: Idea Screening
Step 7: Test Marketing
Standard test markets
Controlled test markets
Simulated test markets
Stage 1: Idea Generation
Internal Idea Sources
External Idea Sources
Step 8: Commercialization
Class Activity
New Product Development
Sales and Profits Over A Products Life
