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    The Product Life Cycle

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    chowa fellon
    The document discusses the four stages of the product life cycle: introduction, growth, maturity, and decline. During the introduction stage, sales are low but costs are high due to marketing and development. The growth stage sees increasing sales and profits as production scales up. In maturity, the market is established but also competitive as companies fight for market share. Finally, decline occurs as the market becomes saturated or consumers switch to newer products.

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    The Product Life Cycle

    Uploaded by

    chowa fellon
    45 views3 pages
    The document discusses the four stages of the product life cycle: introduction, growth, maturity, and decline. During the introduction stage, sales are low but costs are high due to marketing and development. The growth stage sees increasing sales and profits as production scales up. In maturity, the market is established but also competitive as companies fight for market share. Finally, decline occurs as the market becomes saturated or consumers switch to newer products.

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    THE PRODUCT LIFE CYCLE

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    The document discusses the four stages of the product life cycle: introduction, growth, maturity, and decline. During the introduction stage, sales are low but costs are high due to marketing and development. The growth stage sees increasing sales and profits as production scales up. In maturity, the market is established but also competitive as companies fight for market share. Finally, decline occurs as the market becomes saturated or consumers switch to newer products.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    45 views3 pages

    The Product Life Cycle

    Uploaded by

    chowa fellon
    The document discusses the four stages of the product life cycle: introduction, growth, maturity, and decline. During the introduction stage, sales are low but costs are high due to marketing and development. The growth stage sees increasing sales and profits as production scales up. In maturity, the market is established but also competitive as companies fight for market share. Finally, decline occurs as the market becomes saturated or consumers switch to newer products.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    THE PRODUCT LIFE CYCLE

    Most companies understand the different product life cycle stages, and that
    the products they sell all have a limited lifespan, the majority of them will
    invest heavily in new product development in order to make sure that their
    businesses continue to grow.

    Product Life Cycle Stages

    The product life cycle has 4 very clearly defined stages, each with its own
    characteristics that mean different things for business that are trying to
    manage the life cycle of their particular products.

    Introduction Stage

    This stage of the cycle could be the most expensive for a company launching
    a new product. The size of the market for the product is small, which means
    sales are low, although they will be increasing. On the other hand, the cost of
    things like research and development, consumer testing, and the marketing
    needed to launch the product can be very high, especially if it’s a
    competitive sector.

    The impact on the marketing mix is as follows:


    Price: The pricing strategy used may be low penetration pricing to build
    market share rapidly or skimming pricing strategy to recover the
    development costs.

    Product: Branding and quality level is established, intellectual property and


    protection such as patents and trademarks are obtained.

    Place: Distribution is selective until consumers show acceptance of the


    product.

    Promotion: Promotion is aimed at innovators and early adopters . Marketing


    communication seeks to build product awareness and to educate potential
    customers about the product.

    Growth Stage

    The growth stage is typically characterized by a strong growth in sales and


    profits, and because the company can start to benefit from economies of
    scale in production, the profit margins, as well as the overall amount of
    profit, will increase. This makes it possible for businesses to invest more
    money in the promotional activity to maximize the potential of this growth
    stage.

    The impact on the marketing mix is as follows:

    Price: The price at this stage may be maintained as the firm is enjoying
    increasing demand with little competition.

    Product: The product quality is aimed at additional features and support


    services may be added.

    Place: Distribution channels are added as demand increases and customers


    accept the product.

    Promotion: Promotional activities are aimed at a broader audience.


    Maturity Stage

    During the maturity stage, the product is established and the aim for the
    manufacturer is now to maintain the market share they have built up. This is
    probably the most competitive time for most products and businesses need to
    invest wisely in any marketing they undertake. They also need to consider
    any product modifications or improvements to the production process that
    might give them a competitive advantage.

    The impact on the marketing mix is as follows:

    Price: Price may be lower because of the new competition.

    Product: The product features may be enhanced to differentiate the product


    from that of the competitors.

    Place: Intensive distribution and incentives may be given to distributors to


    encourage preference over competition goods.

    Promotion: Emphasizes product differentiation.

    Decline Stage

    Eventually, the market for a product will start to shrink, and this is what’s
    known as the decline stage. This shrinkage could be due to the market
    becoming saturated (i.e. all the customers who will buy the product have
    already purchased it), or because the consumers are switching to a different
    type of product. While this decline may be inevitable, it may still be possible
    for companies to make some profit by switching to less-expensive
    production methods and cheaper markets.

    As the sales decline the firm has several options:

     Maintain the product by adding new features and finding new uses.
     Harvest the product. Reduce costs and continue to offer it to a loyal
    niche.
     Discontinue the product or sell it to another firm that is willing to
    continue the product.

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