Download - Product Life Cycle_Vivek Singh_169

8/3/2019 Product Life Cycle_Vivek Singh_169

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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


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



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Sales

Costs

Profits


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



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Sales

Costs

Profits


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



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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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