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Product Life Cycle By Jonathan Cook CMU | EDU653
Product Life CycleBy Jonathan Cook
CMU | EDU653
Marketing Objectives
For a business to effectively carryout their marketing objectives…
It must be aware of how its’ products interact with their marketing mix
Current and anticipated stages of its’ products in their life cycle
And strategies for extending the product life cycle
Product Life Cycle
The Product Life Cycle consists of 6 stages
1. Development
2. Introduction
3. Growth
4. Maturity
5. Saturation
6. Decline
Product Life Cycle Stage | Development
Product opportunities are developed by identifying gaps in the market, research, brainstorming, and by improving existing products
The product is being designed at this point
Consumers will be surveyed to determine sufficient demand
If there is sufficient demand, a prototype will be developed for testing
Significant cost may be incurred during the development stage
Product Life Cycle | Development
Consumers will be surveyed to determine sufficient demand
If there is sufficient demand, a prototype will be developed for testing
Significant cost may be incurred during the development stage
Many prototypes never leave the development stage, such as this prototype touchscreen Apple phone from 1983.
“Prototype Apple phone from the 1980s” by Ian Lamont is licensed under CC BY 2.0
Product Life Cycle | Development
Test Marketing
Representative market areas are identified for product testing
Testing may result in the product being altered before mass introduction
Safety and reliability is continued to be assessed at this stage
Product Life Cycle | Introduction
A product will move beyond prototype and be introduced to consumers
New products will be introduced to consumers using promotional strategies to create product awareness
Attracting early product adopters may be critical at this stage
“Marketing Product Lifecycle 2” by Jen Beever is licensed under CC BY-NC 2.0
Product Life Cycle | Growth
As product awareness increases, demand will increase
Promotional strategies should be used to continue rapid growth in sales
A product is considered to be established at this point
Product Life Cycles | Growth
Product Fads
Following significant growth, a product can experience immediate and significant decline without a strong maturity stage
Products that experience this type of rapid growth and decline are considered fads
Some fad products may be able to re-enter the market at another time
Brief fashion trends may often be considered fads
“Snuggie Talie” by Olivier Hill is licensed under CC BY-NC-SA 2.0
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Product Capacity
Following Product Introduction, and during the Growth Stage, a business must be working to increase manufacturing capacity
During the Growth Stage, demand may increase suddenly
In order to meet increased demand, a business should have additional storage, manufacturing, and distribution capacity
If a business is unable to meet increased demand, consumer frustration can stymie demand
“Mediq Sverige Kungsbacka warehouse” by Gwan Kho is licensed under CC BY-SA 2.0
Economies of Scale
During market growth, businesses may experience economies of scale
Economies of scale is when a business is able to leverage its assets to decrease a product’s average cost of production and distribution
For example, the capacity of transportation is maximized, reducing the transportation cost per item
“Chinese truck” by Jakob Montraslo is licensed under CC BY 2.0
Diseconomies of Scale
During product and business growth, a business may experience an increase in a product’s average cost of production and distribution
This may be caused by communication, distribution, and other logistical issues as a result of growth
Product Life Cycle | Maturity
Sales growth will slow and plateau during this stage
Ideally, the product will be unique in the marketing with no, or little direct competition
A well established product at this stage is desirable, as it can provide a business with a stable source of income with less marketing effort
Dawn dish soap, a Procter & Gamble product,has been around since 1973, and is considereda leader in its market
“PICT0087” by f_lodinea is licensed under CC BY-NC 2.0
Product Extension Strategies
When a product begins to show signs of decline in its life cycle a business may engage in product extension strategies
Extension Strategies are used to extend the life cycle of a product
Extension Strategies may include
Alternate uses
Example: Teflon, a product developed by DuPont, was first used for artillery fuses. After WWII, DuPont found an alternate use for Teflon, non-stick pans.
Target marketing
Altering components or appearance
Engaging in a promotional push to attract new customers
“1975 Ad, Du Pont Teflon Cookware, “The Clean Winner”” by Classic Film is licensed under CC BY-NC 2.0
Product Life Cycle | Saturation
New businesses will slowly enter the marketing with competing products
As businesses enter the market with competing products that offer greater value or a lower price that market becomes saturated
Businesses must differentiate their products to maintain sales
Product Life Cycle | Decline
Product sales decline as a result of
Changes in product technology in the market
New product offers
Changes in social product taste
New product technology, the MP3 player, caused the decline of the Discman.
“Discman” by mpolla is licensed under CC BY-NC-SA 2.0
