Dr Mohsin Uddin Department of Accounting Faculty of Economics and Administrative Sciences Ishik University Erbil Product life cycle The stages through which a product passes form its development to being withdrawn from sale the phases are ID: 1041867
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1. Chapter-4Product Life CycleDr. Mohsin UddinDepartment of AccountingFaculty of Economics and Administrative SciencesIshik University, Erbil
2. Product life cycleThe stages through which a product passes form its development to being withdrawn from sale; the phases are research and development, launching the product, growth, maturity, saturation and decline.
3. A Human Being Life Cycle Birth Childhood and AdolescencesMature adultOld ageDeath A Product Life CycleResearch and developmentLaunchGrowthMaturityDecline
4. Growth Maturity Decline Introduction Product Life Cycle
5. Product Life Cycle
6. Product is anything which is of value & is offered thro’ voluntary exchangeA change in feature creates a new productService : Set of activities, benefits or satisfaction offered for sale» IntangibleWhat is a product?
7. Goods and/or Services Are the Product
8. Demand for productsWhat is the demand for these products in 2013 compared to 1990????» Fixed phone, land-line» Cell phones» Umbrella» Video cassette player» Diabetes Insulin injections
9. New products meet needs better» Maruti 800 v/s Premier PadminiTechnology changes» Video conference v/s air travelSubstitutes replace a product» Telegrams v/s SMS, SMS v/s Mobile ChatPopulation moves to the next level in Maslow’s NH» Basic variant of a car to full loaded modelWhy would demand change?
10. PLC Concept is Based on Four PremisesProducts have a limited life.Product sales pass through distinct stages, each with different marketing implications.Profits from a product vary at different stages in the life cycle.Products require different strategies at differentlife cycle stages.
11. Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineBegins when the company develops a new-product ideaSales are zeroInvestment costs are highProfits are negativePLC Stages
12. Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineSlow sales growth – cell phones 15 yrs back, Hybrid cars today, HD TVIntensivepromotions, communicationsPrice uncertaintyUncertain competition reactionsUncertain consumer responsesNon-existent profitsNegative cash flowPLC Stages
13. Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineRapid sales growth – cell phones today, internet, LCD TVMarket acceptancePrice stabilizationFeatures stabilizationProfits start coming inBrand building startsCompetition starts buildingPLC Stages
14. Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineSlow sales growth – Landlines, 100ccmotorbikes, fountain pensPricereductions, promotionsFeatures changes /reductions / newProfits go downCompetitors introduce new productsBrand sustainability is needed in communicationPLC Stages
15. Product Life-Cycle StrategiesProduct developmentIntroductionGrowthMaturityDeclineDecline in sales – audio & video cassette players, pagersNew products meetsatisfactionProfits erode(gradually destroy)Communication expenses are stoppedPLC Stages
16. Varies with every product» Can be controlled by marketing effortsChanges with technology introductions» Inventions» Disruptive innovationsPLC Duration
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18. Introduction Growth MaturityDeclineMarketing objectivesCreate product awareness & trialsGain market share, create strong positionsDefend market share, create profitsReduce expenses milk brandsProduct strategyOffer basic ProductsEg. VodafoneOffer product extensions, build service differentiationDiversify brands, items & models Eg. BlackberryPhase out weak productsPriceCharge costPlusPenetration price promotions, deals Eg Dominos in IndiaMatch pricing to strong competitorsCut pricesAdvertising & CommunicationsChosen market segments are addressedSegment awarenessAdvertise differentiationReduce levels toretain loyalistsPlaceBuild Selective DistributionEg. HushpuppiesBuild intensive distributionBuild more intensive distributionGo Selective: Phase out unprofitable outletsMarketing Strategies in the PLC
19. The Product Life Cycle Review
20. Manage the Life CycleProduct Modification:Changing a product’s characteristics package, features, appearance, qualityCompanies market this “new” product to increase salesMarket Modification:Strategy to find new customersModify the product to create new target marketEncourage current customers to use the product moreRepositioning:Change product’s image in relation to competitor’s imageA change in any of the 4 P’s (Marketing Mix)
21. Product Life Cycle ExamplesIntroduction - 3D TVsGrowth - Blue ray discs/DVRMaturity - DVDDecline - Video cassette