MARKETING STRATEGIES OF PRODUCT LIFE CYCLE
Product Life Cycle Strategies INTRODUCTION STAGE GROWTH STAGE MATURITY STAGE
DECLINE STAGE
Contents
Product life cycle is the course of a product’s sales and profits over time.
Product life cycle(PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures
PRODUCT LIFE CYCLE
When we say that a product has a life cycle we assert four things:
Products have a limited life.
Products sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller.
Profits rise and fall at different stages of the product life cycle.
Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life – cycle stages.
Product Life-Cycle
TimeProductDevelop-ment
Introduction Growth Maturity Decline
Sales andProfits
Type of productLevel of competitionMarketing support of the productCustomer taste
The product life cycle depends on-
Four Introductory Marketing Strategies
Rapid-skimmingstrategy
Rapid-skimmingstrategy
Rapid-penetration
strategy
Rapid-penetration
strategy
Slow-penetration
strategy
Slow-penetration
strategy
Slow-skimmingstrategy
Slow-skimmingstrategy
Price
Low
High
PromotionHigh Low
The costs are very highlow sales volumes to startLittle or no competitionDemand has to be createdCustomers have to be prompted to try the
product
Introduction stage
The need for immediate profit is not a pressure.
The product is promoted to create awarenessHeavy expenditures to create trial for Sales
Promotion
Eg. Wikipedia may face competition from Citizendium
Introduction Stage of the PLC
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
costs reduced due to economies of scalesales volume increases significantlyprofitability begins to risepublic awareness increasescompetition begins to increase with a few new
players in establishing marketincreased competition leads to price decreases• Sales Promotion – Reduce expenditures to take advantage of consumer demand
Growth stage
Improves product quality and adds new features and improved styling.
Adds new models and flanker products(i.e., products of different sizes, flavors, and so forth that protect the main product).
It enters new market segments It increases its distribution coverage and enters
new distribution channels. It shifts from product- awareness advertising to
product- preference advertising. It lowers price to attract the next layer of price –
sensitive buyers.
Eg: fair & handsome (promotion of a new product)
Growth Stage of the PLCGrowth Stage of the 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, warrantyOffer 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
costs are lowered as a result of production volumes increasing and experience curve effects
sales volume peaks and market saturation is reached
increase in competitors entering the marketprices tend to drop due to the proliferation of
competing productsbrand differentiation and feature diversification is
emphasized to maintain or increase market shareIndustrial profits go down
Maturity stage
–Profits continue to grow and stay positive throughout–Competition is most intense at this stage; many versions and brands–Strategies to prolong this stage:
• Modify the market• Modify the product• Modify the marketing mix
Marketing strategies for Maturity stageThree potentially useful ways to change the
course for a brand are market, product, and marketing program modification.
Product modification Trying to stimulate sales by modifying the product’s characteristics through
1.Quality improvement Eg: Aashirvaad, Annapurna,Nature fresh
2. Feature improvement Eg: Pulsar 180 to Pulsar 2203. Style improvement Eg; New car models, New Coke
Eg: bajaj
Maturity Stage of the PLC Maturity Stage of the 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 competitorsPrice to match or best competitors
DistributionDistribution Build more intensive distributionBuild more intensive distribution
AdvertisingAdvertising Stress brand differences and benefitsStress brand differences and benefits
costs become counter-optimalsales volume decline or stabilizeprices, profitability diminish
Sales of the new product drop quickly as the target market(s) move on to other things
Profits decline as competitive pressures force lower prices and set promotional spending at a level that maintains the share
Decline stage
– Decisions about the product
• Maintain spending levels to fight it out for what is left• Harvest by cutting spending and riding it out.• Drop the product and move on to the next thing
Eg: Bajaj scooters
Eg. 5.25 Floppy disk
Decline Stage of the PLCDecline Stage of the 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 brandReduce expenditure and milk the brand
Phase out weak itemsPhase out weak items
Cut priceCut price
DistributionDistribution Go selective: phase out unprofitable outletsGo 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
10-26
INTRODUCTION GROWTH MATURITY DECLINE
Marketing management –Philip Kotler Kevin Keller Abraham Koshy Mithileshwar Jha
REFERENCE
THANK YOU !!!
Top Related