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Prepared by-
Vivek Singh
Roll no. 169
IM 18
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A companys positioning and differentiation strategy mustchange 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 posingdifferent 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 ineach life cycle stages.
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product life cycle is the course of aproductssales and profits over time.
product life cycle(PLC) deals with the life of a
product in the market with respect tobusiness or commercial costs and salesmeasures.
The five stages of each product lifecycle areproduct 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
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Low
High cost per customer
Negative
Create product awareness and trial
Offer a basic product
Use cost-plus formula
Distribution Build selective distribution
Promotion Heavy to entice product trial
Summary of Characteristics, Objectives, & Strategies
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising
Average cost per customer
Rising
Maximize market share
Offer extension, service, warranty
Penetration strategy
Distribution Build intensive distribution
Promotion Reduce to take advantage of demand
Summary of Characteristics, Objectives, & Strategies
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak
Low cost per customer
High
Maximize profits while defending market share
Diversify brand and models
Match or best competitors
Distribution Build more intensive distribution
Promotion Increase to encourage brand switching
Summary of Characteristics, Objectives, & Strategies
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Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining
Low cost per customer
Declining
Reduce expenditures and milk the brand
Phase out weak items
Cut price
Distribution Selective: phase out unprofitable outlets
Promotion Reduce to minimum level
Summary of Characteristics, Objectives, & Strategies
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Rapid-skimmingstrategy
Rapid-penetration
strategy
Slow-penetration
strategy
Slow-skimmingstrategy
Price
Low
High
PromotionHigh Low
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Three potentially useful ways to change thecourse for a brand are market, product, andmarketing program modification.
Market Modification
Sales volume = no. of brand users * usage rateper user.
Expand the no. of brand users
Convert nonusers
Enter new market segments
Attract competitors customers
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Increase the usage rate among usersHave consumers use the product on more
occasions.
Have consumers use more of the product oneach occasion
Have consumers use the product in newways.
Product modificationTrying to stimulate sales by modifying the
products characteristics through
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Quality improvement:
Aims at increasing the products functionalperformance.
Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh
Feature improvement
Aims at adding new features, such as size, weight,materials, additives, and accessories, that expand theproducts performance, versatility, safety, orconvenience.
Style improvement
Aims at increasing the products esthetics appeal.
Eg; New car models, New Coke
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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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