Description
This presentation explains the product life cycle and its different stages
Product Life Cycle
1
At the End of the Session
We shall be able to – • Understand the whole Product Life Cycle (PLC) and its stages. •Understand Market Strategies for different stages of the PLC. •Understand the position of product in different stages of the PLC. •Justify PLC is a dependent variable which is determined by market actions.
2
Important Terms
• Customer Types: Innovators , Early Adopters , Early Majority , Late Majority , Laggards. • Brand Extension -Line Extn, Category Extn. • Market Skimming And Penetration Pricing. • Hardcore Loyals.
3
Product Life Cycle
4
Product Life Concept
• Products have a limited life. • Product sales pass through distinct stages with each stage posing different challenges, opportunities, problems. • Profits rise/fall during different stages of PLC. • Products require different. marketing/finance/manufacturing/purchasing /HR strategies at each stage of PLC.
5
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • • • • Low sales & Negative profits High costs per customer. Few competitors. Innovator customers
6
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • • • • • Rising sales Average costs Rising profits Early adopters. Growing competition.
7
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • Peak sales & Low costs. • High profits. • Early & Late majority customers. • Stable/declining competition.
8
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • • • • • Declining sales. Low costs. Declining profits. Laggard customers. Declining competition.
9
PLC VARIANTS
GROWTH –SLUMPMATURITY PATTERN
CYCLE – RECYCLE PATTERN
SCALLOPED PATTERN
SALES GROW THEN FALL TO PETRIFIED LEVELS.
SALES GROW THEN FALL AND THEN COMPANY GIVES ANOTHER PUSH.
SALES PASS THROUGH SERIES OF PLCs DUE TO DISCOVERY OF NEW 10 USERS/CHARC.
Features of PLC
• Product category --- (oral care/ skin care). • Product form -------- (paste/ cake). • Products --------------(toothpaste/ soap). • Brands -----------------(Colgate Herbal/ Lux). 1. Product Categories have longest PLCs. 2. Brands have shorter PLCs. 3. Product forms follow PLC structure better than product category.
11
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: to create awareness and trial. • Offer a basic product. • Price – Skimming , Penetration. • Selective distribution. • Induce trial via heavy sales promotion.
12
Product Pricing & Promotion In Introduction Stage
13
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: maximize market share. • Offer service, product extensions, warranty. • Enter New Market segment. • Price to penetrate. • Intensive distribution. • Awareness and interest – mass market.
14
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: maximize profit while defending market share. • Diversify brands/items. • Price to match or beat competition. • Intensive distribution. • Stress brand differences and benefits. • Increase promotions to encourage switching.
15
Marketing Strategies In Maturity Stage
• Market Modification : • Sales Vol. = (No. of Brand users) *(Usage rate per user). • Sales volume may be increased by influencing constituent variants. Number of brand users. Usage Rate per user. 1. Converting non users. 1. More frequent use. 2. Entering new mkt segmt. 2. More Usage per 3. Win competition. Occasion. 3. New/More Varied user. 16
Marketing Strategies In Maturity Stage
Product Modification : Product modification could be: 1. Quality improvement. 2. Feature improvements. 3. Style improvements. Marketing Mix Modification : 1. Price. 2. Distribution. 3. Advertisement. 4. Sales Promotion. 5. Personal Selling. 6. Services.
17
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: Reduce costs and milk the brand • Phase out weak models • Cut price • Selective distribution • Reduce advertising to levels needed to retain hard-core loyalists • Reduce promotions to minimal levels
18
Comparison Of The Stages
19
Factors to Identify the stage of your product in PLC
• Brand Recall or awareness about the product. Eg. GSM phones (Maturity), 3G technology (Growth) • Favorable reviews in media (print or TV). Eg. DTH (Growth) , Mobile Urban (Maturity). • Competitor’s Marketing and Pricing Strategy. Eg. Pepsi – Cola (Maturity) , Pulsar (Maturity). • Consumer pattern. Eg.
20
• • • •
• • • •
Factors to Identify the stage of your product in PLC
Market size by year. New product growth, sales & profit (%). New competitor product sales & growth (%). Number of competitors entered and left the market by year. Market growth rate by year: tells us if our new products outpacing out rivals and the market as a whole. Investment in marketing (such as advertising, trade shows, and direct sales forces) by year. Investment in R&D by year. New products developed : tells us whether we have a rich enough product pipeline to address a particular market segment. 21
References
• Marketing Management by Philip Kotler ( 11th,12th , 13th edition) • www.valuebasedmanagement.net • www.learnmarketing.net • www.marketingteacher.com • en.wikipedia.org
22
THANK YOU
23
doc_717645848.pptx
This presentation explains the product life cycle and its different stages
Product Life Cycle
1
At the End of the Session
We shall be able to – • Understand the whole Product Life Cycle (PLC) and its stages. •Understand Market Strategies for different stages of the PLC. •Understand the position of product in different stages of the PLC. •Justify PLC is a dependent variable which is determined by market actions.
2
Important Terms
• Customer Types: Innovators , Early Adopters , Early Majority , Late Majority , Laggards. • Brand Extension -Line Extn, Category Extn. • Market Skimming And Penetration Pricing. • Hardcore Loyals.
3
Product Life Cycle
4
Product Life Concept
• Products have a limited life. • Product sales pass through distinct stages with each stage posing different challenges, opportunities, problems. • Profits rise/fall during different stages of PLC. • Products require different. marketing/finance/manufacturing/purchasing /HR strategies at each stage of PLC.
5
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • • • • Low sales & Negative profits High costs per customer. Few competitors. Innovator customers
6
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • • • • • Rising sales Average costs Rising profits Early adopters. Growing competition.
7
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • Peak sales & Low costs. • High profits. • Early & Late majority customers. • Stable/declining competition.
8
Stages of the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline • • • • • Declining sales. Low costs. Declining profits. Laggard customers. Declining competition.
9
PLC VARIANTS
GROWTH –SLUMPMATURITY PATTERN
CYCLE – RECYCLE PATTERN
SCALLOPED PATTERN
SALES GROW THEN FALL TO PETRIFIED LEVELS.
SALES GROW THEN FALL AND THEN COMPANY GIVES ANOTHER PUSH.
SALES PASS THROUGH SERIES OF PLCs DUE TO DISCOVERY OF NEW 10 USERS/CHARC.
Features of PLC
• Product category --- (oral care/ skin care). • Product form -------- (paste/ cake). • Products --------------(toothpaste/ soap). • Brands -----------------(Colgate Herbal/ Lux). 1. Product Categories have longest PLCs. 2. Brands have shorter PLCs. 3. Product forms follow PLC structure better than product category.
11
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: to create awareness and trial. • Offer a basic product. • Price – Skimming , Penetration. • Selective distribution. • Induce trial via heavy sales promotion.
12
Product Pricing & Promotion In Introduction Stage
13
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: maximize market share. • Offer service, product extensions, warranty. • Enter New Market segment. • Price to penetrate. • Intensive distribution. • Awareness and interest – mass market.
14
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: maximize profit while defending market share. • Diversify brands/items. • Price to match or beat competition. • Intensive distribution. • Stress brand differences and benefits. • Increase promotions to encourage switching.
15
Marketing Strategies In Maturity Stage
• Market Modification : • Sales Vol. = (No. of Brand users) *(Usage rate per user). • Sales volume may be increased by influencing constituent variants. Number of brand users. Usage Rate per user. 1. Converting non users. 1. More frequent use. 2. Entering new mkt segmt. 2. More Usage per 3. Win competition. Occasion. 3. New/More Varied user. 16
Marketing Strategies In Maturity Stage
Product Modification : Product modification could be: 1. Quality improvement. 2. Feature improvements. 3. Style improvements. Marketing Mix Modification : 1. Price. 2. Distribution. 3. Advertisement. 4. Sales Promotion. 5. Personal Selling. 6. Services.
17
Objectives and Strategies for the Product Life Cycle
PLC Stages
• • • • Introduction Growth Maturity Decline
• Objective: Reduce costs and milk the brand • Phase out weak models • Cut price • Selective distribution • Reduce advertising to levels needed to retain hard-core loyalists • Reduce promotions to minimal levels
18
Comparison Of The Stages
19
Factors to Identify the stage of your product in PLC
• Brand Recall or awareness about the product. Eg. GSM phones (Maturity), 3G technology (Growth) • Favorable reviews in media (print or TV). Eg. DTH (Growth) , Mobile Urban (Maturity). • Competitor’s Marketing and Pricing Strategy. Eg. Pepsi – Cola (Maturity) , Pulsar (Maturity). • Consumer pattern. Eg.
20
• • • •
• • • •
Factors to Identify the stage of your product in PLC
Market size by year. New product growth, sales & profit (%). New competitor product sales & growth (%). Number of competitors entered and left the market by year. Market growth rate by year: tells us if our new products outpacing out rivals and the market as a whole. Investment in marketing (such as advertising, trade shows, and direct sales forces) by year. Investment in R&D by year. New products developed : tells us whether we have a rich enough product pipeline to address a particular market segment. 21
References
• Marketing Management by Philip Kotler ( 11th,12th , 13th edition) • www.valuebasedmanagement.net • www.learnmarketing.net • www.marketingteacher.com • en.wikipedia.org
22
THANK YOU
23
doc_717645848.pptx