Life Cycle Strategies 14
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Transcript of Life Cycle Strategies 14
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Slide 14.1
New-product development and productlife-cycle strategies
Chapter 14
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Slide 14.25The product life-cycle
The product life-cycle (PLC) is the course of a
products sales and profits over its lifetime. It
involves five stages:
Product development
Introduction
Growth
Maturity
Decline
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Slide 14.26
Figure 14.2Sales and profits over the products life from inception to demise
The product life cycle
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Slide 14.27The PLC as an effective marketing tool
The PLC can be applied to product classes as
well as styles, fashions and fads.
The PLC will reflect these aspects in the
length and type of PLC as illustrated:
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Slide 14.28
Figure 14.3 Marketers need to understand and predict style, fashion and fad
The PLC as an illustrator
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Slide 14.29Product / concept development stage
Product concept converted into meaningful
consumer terms of a product image.
Concept tested to ascertain commercial
appeal.
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Slide 14.30Introduction stage
The phase where the new product is
distributed and made available for purchase.
The market pioneer has much responsibility
when devising the appropriate strategy as itsets the stage for the products introduction to
the consumer.
Characterised by high promotional costs.
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Slide 14.31Introduction stage strategies
Strategies are based upon the product and the
dynamics of the market
Skim the market slowly using high price and
relatively low promotional activity. Skim rapidly by using a high price and high
promotion strategy if the market is price insensitive.
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Slide 14.32Growth stage
The product sales begin to increase rapidly.
Profit is generated as a result of effective
promotional activity and the spread of costs
over larger volume of sales.
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Slide 14.33Maturity stage
The phase where sales growth slows or levels
off.
Marketers then seek to extend the life of the
brand by the following methods; New market development
New usage and application
Product development and modification
Marketing innovation
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Slide 14.34Decline stage
Sales decline.
Marketers need to determine the value of
retaining the product versus the cost of
divesting from the product. This is weighed up against the market
dynamics.
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Slide 14.35
Table 14.2 Summary of product life-cycle characteristics, objectives and strategiesSource: Philip Kotler, Marketing Management: Analysis, planning, implementation, and control, 11th edn, 2003, p. 340. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ.