Product Life Cycle –a marketing Strategy SSM
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Transcript of Product Life Cycle –a marketing Strategy SSM
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Product Life Cycle –a Product Life Cycle –a marketing Strategy marketing Strategy
(Marketing)(Marketing)Shivsagar Mukherjee
MBA SEM-II(IASE UNIVERSITY)A.P.I.M.
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Learning ObjectiveLearning Objective
• Understanding the meaning of PRODUCT LIFE CYCLE
• Learn about the stages of PRODUCT LIFE CYCLE
• What are the various marketing strategies used in different stages of Product Life cycle ?
• Demerits in using the life cycle technique for assessing the life cycle of a product.
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Definition Definition
• The product life cycleproduct life cycle is a concept that seeks to describe a product’s sales, competitors, customers, and marketing emphasis from its beginning until it is removed from the market.
• Companies often desire a balanced balanced product portfolioproduct portfolio.
• The life-cycle concept can be applied to a product class, a product form, and a product brand.
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Applications of Product Life Applications of Product Life CycleCycle
• Product class - has the longest life cycle (e.g., gas-powered cars)
• Product form -tends to have the standard PLC shape (e.g., dial telephone)
• Brand - can change quickly because of changing competitive attacks and responses (e.g., Tide, Cheer)
• Style - is a basic and distinctive mode of expression (e.g., formal clothing, Danish modern furniture)
• Fashion -is a popular style in a given field (e.g., business casual)
• Fad -is a fashion that enters quickly, is adopted quickly, and declines fast (e.g., pet rocks)
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Figure ofFigure ofStyles, Fashions, FadsStyles, Fashions, Fads
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Stages Of Product Life CycleStages Of Product Life Cycle
• Introduction Stage• Growth Stage• Maturity Stage• Decline Stage
– Deletion– Harvesting
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Generalised Graph of PLC Generalised Graph of PLC
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Sales Cycle of productSales Cycle of product
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Description of stages of plcDescription of stages of plc
• Introduction Stage:
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Low sales Low sales
High cost per customerHigh cost per customer
NegativeNegative
Create product awareness and trial
Create product awareness and trial
Offer a basic productOffer a basic product
Use cost-plus Use cost-plus
DistributionDistribution Build selective distributionBuild selective distribution
AdvertisingAdvertising Build product awareness among early adopters and dealers
Build product awareness among early adopters and dealers
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Description Cont.Description Cont.
• Growth Stage of PLC:
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Rapidly rising sales Rapidly rising sales
Average cost per customerAverage cost per customer
Rising profitsRising profits
Maximize market shareMaximize market share
Offer product extensions, service, warranty
Offer product extensions, service, warranty
Price to penetrate marketPrice to penetrate market
DistributionDistribution Build intensive distributionBuild intensive distribution
AdvertisingAdvertising Build awareness and interest in the mass market
Build awareness and interest in the mass market
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Description Cont.Description Cont.
• Maturity stage of PLC:
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Peak salesPeak sales
Low cost per customerLow cost per customer
High profitsHigh profits
Maximize profit while defending market share
Maximize profit while defending market share
Diversify brand and modelsDiversify brand and models
Price to match or best competitors
Price to match or best competitors
DistributionDistribution Build more intensive distributionBuild more intensive distribution
AdvertisingAdvertising Stress brand differences and benefits
Stress brand differences and benefits
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Maturity stage of PLC Cont.Maturity stage of PLC Cont.
• Modifying the Product: – Changing characteristics such as quality, features,
or style to attract new users and to inspire more usage.
• How?– Improve durability, reliability, speed, taste.– Improve styling and attractiveness.– Add new features.– Expand usefulness, safety, convenience.
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Elongating the Maturity Elongating the Maturity Stage:Stage:
• Modifying the Product :
Gillette’s Fusion razor combines a precision trimmer blade (on back) with a five blade shaving surface (on front). The flexible comfort guard and Enhanced Indicator Lubrastrip (containing vitamin E and aloe) enhance shaving comfort.
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Continuing the Maturity Continuing the Maturity Stage of PLCStage of PLC
• Modifying the Marketing Mix: – Improving sales by
changing one or more marketing mix elements.
• How? – One method is to
launch aggressive sales promotion programs, such as rebates.
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Retention of maturity stage Retention of maturity stage of PLCof PLC
• Modifying the Marketing Mix, cont.: – Improving sales by changing one or more
marketing mix elements.
• How Else Can This Be Accomplished?– Cutting prices.– Launching a better ad campaign.– Moving into larger market channels, including
mass merchandisers.– Offering new or improved services to buyers.
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Description Cont:Description Cont:
• Decline stage of PLC:
SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
ProductProduct
PricePrice
Declining salesDeclining sales
Low cost per customerLow cost per customer
Declining profitsDeclining profits
Reduce expenditure and milk the brand
Reduce expenditure and milk the brand
Phase out weak itemsPhase out weak items
Cut priceCut price
DistributionDistribution Go selective: phase out unprofitable outlets
Go selective: phase out unprofitable outlets
AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers
Reduce to level needed to retain hard-core loyal customers
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More of Decline Stage Of More of Decline Stage Of PLC:PLC:
• In Decline stage is fresh oxygen possible to inoculate in the Product? How?
Shred the Dead , as dead are contagious for Health.Harvest new crop for the new season as it unleashes fresh life into the product.
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Decline graph of PLC:Decline graph of PLC:
• Focus on the Decline part of this Graph of PLC:
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Prediction of PLCPrediction of PLC
• Which stage of the PLC?• How do you know?
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Attention Please:Attention Please:
• Why Profit peak before Sales?
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Cost and profit Graph in PLCCost and profit Graph in PLC
• Analyse it ?
Cost
Break Even
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Demerits of PLC TechniqueDemerits of PLC Technique
• Hard to identify which stage of the PLC the product is in.
• Hard to pinpoint when the product moves to the next stage.
• Hard to identify factors that affect product’s movement through stages.
• Hard to forecast sales level, length of each stage, and shape of PLC.
• Strategy is both a cause and result of the PLC.
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DiscussionsDiscussions
Debatable Question?• What is it?• Is really prediction possible in PLC
technique in times to come?
• Scratch your head please or please be in the process of innovating for the answer.
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Thank you Thank you
• Thanks for your being so patient and a good listener
• Also thanks for the interest you all showed.
Thanking you again.
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Queries:Queries:
ANY QUERIES ?