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ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 1
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 2
PLC - Product Life Cycle
• The purpose of having a diagram is to help you understand the changes, in the revenue that is made, as you go through the different stages of selling a product, from the beginning, to the end.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 3
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
The time at each stage varies greatly
Page 336 in 8th Edition
Page 260 in 9th Edition
DVD
Mini-discElectric cars
VR*
*= virtual reality
Digital cameras
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 4
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Introduction
The seller tries to stimulate demand
Promotion campaigns to get increase public awareness
Explain how the product is used,
• Features Advantages Benefits
You will lose money, but you expect to make profits in the future
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 5
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Introduction
•Sales are low, and profits are below the line because your costs are greater than the amount of money you make
•you have “negative” profit
•Need to spend a lot of money on promotion
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 6
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Growth
A lot is sold - The seller tries to sell as much as possible
Other competitor companies watch, and decide about joining in with a competitor product
“success breeds imitation” (Text)
Growth will continue until too many competitors in the market - and the market is saturated
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 7
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Growth
•At the end of the growth stage, profits start to decline when competition means you have to spend more money on promotion to keep sales going.
•Spending money on promotion cuts into your profit
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 8
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Maturity
Many competitors have joined - the market is saturated
The only way to sell is to begin to lower the price - and profits decrease
It is difficult to tell the different between products since most have the same F.A.B. - Features, Advantages & Benefits
Competition can get “Nasty” and commercials are intense
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 9
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Maturity
“Persuasive Promotion” becomes more important during this stage
That is to say, you have commercials almost begging the customer to still buy your product because you still make it just as good.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 10
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Decline
Newer products are now more attractive - even a low low price does not make consumers want to buy.
Profit margin declines - and so the only way to make money is to sell a high volume
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 11
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Decline
To increase volume you try to
1. Increase the number of customers - get new customers
2. Increase the amount each customer uses
Extending the
Product Life
Cycle
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 12
1. Increase frequency of use by present customers
2. Add new users
3. Find new uses
4. Change product quality or packaging
Extending the Product Life Cycle
Market Modification
Product Modification
Purpose: to sell more product and cover original investment
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 13
Extending the product Cycle
• to prevent the product going into to prevent the product going into decline you modify the marketdecline you modify the market
MARKET MODIFICATIONMARKET MODIFICATION • you look for new consumers by changing
the product so it has new users - and then new customers (Baking soda, vinegar, (Baking soda, vinegar, Q-tips,Q-tips, Avon Skin So Soft, vaseline Avon Skin So Soft, vaseline
Examples from
class
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 14
Extending the product Cycle
• MARKET MODIFICATIONMARKET MODIFICATION
examples
Windex for cleaning jewelry
Javex bleach for toilets
Lemons for hair colouring
beer for hair
Bounce for in the garbage, gym bag etc.
Examples from
class
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 15
• to prevent the product going into to prevent the product going into decline you modify the productdecline you modify the product PRODUCT MODIFICATIONPRODUCT MODIFICATION
• adding new features, variations, model varieties will change the consumer reaction - create more demand
• therefore you attract more users
Extending the product Cycle
Exam
ples
from
cla
ss
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 16
• PRODUCT MODIFICATIONPRODUCT MODIFICATION
• examples
• condoms - colours, features
• CD players
• chip flavours - many kinds
• flavoured tongue depressors
• couples seats at movie theatre
Extending the product Cycle
Exam
ples
from
cla
ss
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 17
• PRODUCT MODIFICATIONPRODUCT MODIFICATION
• examples continued
• digital sound at theatres
Extending the product Cycle
Exam
ples
from
cla
ss
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 18
Overlap of Life Cycle for Products A and B
WINDOWS 95
1991 1995 1996 1997
WINDOWS 3.1
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 19
Most people have a problems thinking this theory is relevant because they apply it to specific product brands - it should be applied only to a general product category
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 20
Length of Cycle Stages
• Products move through the cycle at different speeds
• sometimes introduction is very long, or very short, depending on how easy it is for the public to understand the F.A.B.
• Not all products follow the same pattern
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 21
Life Cycle Length
• Some products move very fast because they are new and have no competition so the intro stage is short, and they go direct to growth stage.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 22
Life Cycle Length
Because of• technology and• globalization• the introduction stage is getting very
short• some cycles more quickly to maturity,
then have many product modifications so the decline stage drags on and on
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 23
Speed of the PLC• Since the Intro Stage is getting shorter,
and sometimes the Growth Stage doesn’t last too long (because competitors move in) companies must continually come up with new products
• You can tell when they are in the growth stage because this is when they introduce new model variations, and some improvements to the productPage 340
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 24
Alternative Product Life Cycles
TamagachiPocket pagers
Failures that do not go through the 4 steps
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 25
• Fashions - currently popular products that tend to follow recurring life cycleseg. Wide lapels, 3 button suits, high heels vs. wedge heel
• “the currently acceptable style” p. 265
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 26
• Fads - Fashions with abbreviated life cycles - only popular with certain groups
• - music
• - fast food
• - children’s toys
• - “adult toys”
Page 265
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 27
Eg. Watches w red LCD
Page 188
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 28
Product Life Cycle Considerations in Marketing Strategy
• Understand that profits have a predictable pattern
• in the early stages, focus is on product information
• in the later stages, focus is on brand promotion
• use market segmentation in maturity stage to maintain strong core customer basis
Page 188
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Product Life
Cycle
Slide 29
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
The time at each stage varies greatly
Mini-discElectric cars
*= virtual reality
Digital cameras
Monopoly Monopolistic Oligopoly Pure Competition