Explains the concept of product life cycles

Product Life CyclesProduct Life Cycles

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ProductLife Cycle (PLC)

A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death).

Product Life Cycle

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Four Stages of the Product Life CycleFour Stages of the Product Life Cycle

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Life-Cycle Management

Entry Strategies

Managingonthe Rise

Survivingthe Decline

GrowthIntroduction Maturity Decline

Managingduring Maturity

Introductory Stage

High failure rates Little competition Frequent product modification Limited distribution High marketing and production costs Negative profits with slow sales increases Promotion focuses on awareness and

information Communication challenge is to stimulate

primary demand

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Growth Stage

Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Aggressive advertising of the

differences between brands Wider distribution

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Maturity Stage

Sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important roles Heavy promotions to consumers and dealers Marginal competitors drop out Niche marketers emerge

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Decline Stage

Long-run drop in sales Large inventories of

unsold items Elimination of all nonessential

marketing expenses “Organized abandonment”

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Product Life-Cycle Stages

Product-Market Growth Matrix

The BCG Matrix

The GE Business Screen

Length of Product Life-Cycle

Product life-cycle variations

Planned Obsolescence

TechnologicalObsolescence

StyleObsolescence

Relationships between the Diffusion Process and the Relationships between the Diffusion Process and the Product Life Cycle Product Life Cycle

Productlife cyclecurve

Diffusioncurve

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1. Increase frequency of use by present customers

2. Add new users

3. Find new uses

Extending the Product Life Cycle

Market Modification

Product Modification

Purpose: to sell more product and cover original investment

4. Change product quality or packaging

Extending the product Cycle• to prevent the product going into

decline you need to modify the market

MARKET MODIFICATION • you look for new consumers by changing

the product so it has new users

• to prevent the product going into decline you need to modify the product PRODUCT MODIFICATION

• adding new features, variations, model varieties will change the consumer reaction - create more demand

Extending the product Cycle

Some cases