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Marketing
 management

Product life cycle
Introduction
A product is introduced among consumers, and if
consumers perceive it as meeting their needs and want, it
experiences a period of growth. Subsequently, it reaches
the stage of maturity and when it loses its appeal, its
decline starts and eventually is may be taken off the
market (demise). The classical product life cycle curves
are depicted as “S” shaped and generally divided in four
stages: Introduction, growth, maturity, and decline.
Common Product Life Curves



    Sale                 Sales
                                                     Sales
    s




      Time                       Time                        Time
    (a) Growth-Decline   (b) Cycle-Recycle Pattern   (c) Innovative Maturity or
l         plateau                                         Scalloped Pattern
Common Product Life Curves


Sales




                         Profits




Loss
        Introduction   Growth            Maturity         Decline
                                Time

                       (d) Classical Life Cycle Pattern
Introduction Stage
The introductory stage is viewed as fairly risky and quite expensive
because large amounts of money is spent on advertising and other
tools of marketing communications to create consumer awareness
in sufficiently large numbers, and encourage trial.

3D Televisions: 3D may have been around for a few decades, but
only after considerable investment from broadcasters and
technology companies are 3D TVs available for the home,
providing a good example of a product that is in the Introduction
Stage.
Introduction Stage of the
              PLC
      Sales                   Low sales
      Costs             High cost per customer
     Profits                    Negative
                       Create product awareness
Marketing Objectives
                                and trial
    Product              Offer a basic product
      Price                  Use cost-plus
  Distribution         Build selective distribution
                        Build product awareness
  Advertising          among early adopters and
                                 dealers
Growth Stage
The growth stage of life cycle is characterised by a sharp rise
in sales. Only a small percentage of new products introduced
survive to reach the growth stage.

Tablet PCs: There are a growing number of tablet PCs for
consumers to choose from, as this product passes through the
Growth stage of the cycle and more competitors start to come
into a market that really developed after the launch of Apple’s
iPad. Another example is NANO car.
Growth Stage of the
   PLC
      Sales               Rapidly rising sales
      Costs            Average cost per customer
     Profits                  Rising profits
Marketing Objectives     Maximize market share
    Product             Offer product extensions,
                            service, warranty
      Price             Price to penetrate market
  Distribution          Build intensive distribution
  Advertising          Build awareness and interest
                            in the mass market
Maturity Stage

Most products after surviving competitive battles, winning
customer confidence and successful through growth phase enter
their maturity stage. The sales plateau, and this flattening of
sales usually lasts for some time because most products in the
category have reached their maturity stage, and there is stability
in terms of demand, technology, and competition.

Laptops: Laptop computers have been around for a number of
years, but more advanced components, as well as diverse
features that appeal to different segments of the market, will help
to sustain this product as it passes through the Maturity stage.
Maturity Stage of the PLC


                                  Peak sales
         Sales
         Costs              Low cost per customer

        Profits              Maximize profit while
                                 High profits
                                  defending
   Marketing Objectives         market share
       Product            Diversify brand and models
                             Price to match or best
         Price                     competitors
                              Build more intensive
     Distribution
                              distribution
     Advertising          Stress brand differences and
                                     benefits
Decline Stage
Decline stage sets in when customer preferences change due to the
availability of technologically superior products and consumers’ shift in
values, beliefs, and tastes to products offering more value.
Decline Stage of the PLC


                                Declining sales
         Sales
                            Low cost per customer
         Costs
                                Declining profits
        Profits
                          Reduce expenditure and milk
   Marketing Objectives            the brand
                             Phase out weak items
       Product
                                   Cut price
         Price              Go selective: phase out
     Distribution             unprofitable outlets
                           Reduce to level needed to
     Advertising                     retain
                           hard-core loyal customers
Implications and Limitations of Product Life
Cycle Concept


Product life cycle concept shows a framework to spot the occurrence
of opportunities and threats in a product market and the industry. This
can help firms to reassess their objectives, strategies, and different
elements of marketing programme.
Product life cycle
Introduction- HUL



Hindustan Unilever Limited (HUL) is India's
largest FMCG company, touching the lives of
two out of three Indians with over 20 distinct
categories in home & personal care products
and food & beverages.
INTRODUCTION-LUX
                                              1960
                                            LUX went
                                             colored
                                 1929
                                 LUX
                              launched in
                   1925          India
               LUX launched
                in USA as
    1916        Toilet soap
LUX launched
 in USA as
Laundry soap
PRODUCT LIFE CYCLE
Introduction (1929- 1950s)
Company Objectives               Actions
         Sales                      Low


 Cost of manufacturing              High
         Profits                  Negative
  Marketing Objective    Create product awareness in
                                 major cities
   Product strategy         Offer a basic product
    Price strategy          Higher than Lifebuoy
     Distribution         Created network in major
                                    cities
  Advertising strategy     Awareness among early
                                  adopters.
Growth- (1950s- 1990s)
Company Objectives             Actions
        Sales                 Rising Sales

Cost of manufacturing    Average cost reduction
        Profits           Positively increasing
 Marketing Objective    Maximise market share
  Product strategy           Offer variants
    Price strategy      To penetrate the market
     Distribution       Intensive network in the
                             entire country
 Advertising strategy   Awareness an interest in
                              mass market
Maturity-(1990s to till date )
Company Objectives                 Actions
         Sales                      Peak sales

 Cost of manufacturing                Low
        Profits                       High
  Marketing Objective    Maximize profit while defending
                                 market share
   Product strategy             Diversify brand
     Price strategy      To match the nearest competitor
     Distribution        More intensive focusing on rural
                                      area
  Advertising strategy   Multiple brand ambassadors for
                               different variants.
Thank you

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Product life cycle

  • 2. Introduction A product is introduced among consumers, and if consumers perceive it as meeting their needs and want, it experiences a period of growth. Subsequently, it reaches the stage of maturity and when it loses its appeal, its decline starts and eventually is may be taken off the market (demise). The classical product life cycle curves are depicted as “S” shaped and generally divided in four stages: Introduction, growth, maturity, and decline.
  • 3. Common Product Life Curves Sale Sales Sales s Time Time Time (a) Growth-Decline (b) Cycle-Recycle Pattern (c) Innovative Maturity or l plateau Scalloped Pattern
  • 4. Common Product Life Curves Sales Profits Loss Introduction Growth Maturity Decline Time (d) Classical Life Cycle Pattern
  • 5. Introduction Stage The introductory stage is viewed as fairly risky and quite expensive because large amounts of money is spent on advertising and other tools of marketing communications to create consumer awareness in sufficiently large numbers, and encourage trial. 3D Televisions: 3D may have been around for a few decades, but only after considerable investment from broadcasters and technology companies are 3D TVs available for the home, providing a good example of a product that is in the Introduction Stage.
  • 6. Introduction Stage of the PLC Sales Low sales Costs High cost per customer Profits Negative Create product awareness Marketing Objectives and trial Product Offer a basic product Price Use cost-plus Distribution Build selective distribution Build product awareness Advertising among early adopters and dealers
  • 7. Growth Stage The growth stage of life cycle is characterised by a sharp rise in sales. Only a small percentage of new products introduced survive to reach the growth stage. Tablet PCs: There are a growing number of tablet PCs for consumers to choose from, as this product passes through the Growth stage of the cycle and more competitors start to come into a market that really developed after the launch of Apple’s iPad. Another example is NANO car.
  • 8. Growth Stage of the PLC Sales Rapidly rising sales Costs Average cost per customer Profits Rising profits Marketing Objectives Maximize market share Product Offer product extensions, service, warranty Price Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market
  • 9. Maturity Stage Most products after surviving competitive battles, winning customer confidence and successful through growth phase enter their maturity stage. The sales plateau, and this flattening of sales usually lasts for some time because most products in the category have reached their maturity stage, and there is stability in terms of demand, technology, and competition. Laptops: Laptop computers have been around for a number of years, but more advanced components, as well as diverse features that appeal to different segments of the market, will help to sustain this product as it passes through the Maturity stage.
  • 10. Maturity Stage of the PLC Peak sales Sales Costs Low cost per customer Profits Maximize profit while High profits defending Marketing Objectives market share Product Diversify brand and models Price to match or best Price competitors Build more intensive Distribution distribution Advertising Stress brand differences and benefits
  • 11. Decline Stage Decline stage sets in when customer preferences change due to the availability of technologically superior products and consumers’ shift in values, beliefs, and tastes to products offering more value.
  • 12. Decline Stage of the PLC Declining sales Sales Low cost per customer Costs Declining profits Profits Reduce expenditure and milk Marketing Objectives the brand Phase out weak items Product Cut price Price Go selective: phase out Distribution unprofitable outlets Reduce to level needed to Advertising retain hard-core loyal customers
  • 13. Implications and Limitations of Product Life Cycle Concept Product life cycle concept shows a framework to spot the occurrence of opportunities and threats in a product market and the industry. This can help firms to reassess their objectives, strategies, and different elements of marketing programme.
  • 15. Introduction- HUL Hindustan Unilever Limited (HUL) is India's largest FMCG company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages.
  • 16. INTRODUCTION-LUX 1960 LUX went colored 1929 LUX launched in 1925 India LUX launched in USA as 1916 Toilet soap LUX launched in USA as Laundry soap
  • 18. Introduction (1929- 1950s) Company Objectives Actions Sales Low Cost of manufacturing High Profits Negative Marketing Objective Create product awareness in major cities Product strategy Offer a basic product Price strategy Higher than Lifebuoy Distribution Created network in major cities Advertising strategy Awareness among early adopters.
  • 19. Growth- (1950s- 1990s) Company Objectives Actions Sales Rising Sales Cost of manufacturing Average cost reduction Profits Positively increasing Marketing Objective Maximise market share Product strategy Offer variants Price strategy To penetrate the market Distribution Intensive network in the entire country Advertising strategy Awareness an interest in mass market
  • 20. Maturity-(1990s to till date ) Company Objectives Actions Sales Peak sales Cost of manufacturing Low Profits High Marketing Objective Maximize profit while defending market share Product strategy Diversify brand Price strategy To match the nearest competitor Distribution More intensive focusing on rural area Advertising strategy Multiple brand ambassadors for different variants.

Hinweis der Redaktion

  1. Introduction. In this stage marketers spend heavily on promotions to inform the target market about the new product's benefits. Low or negative profits may encourage the company to price the product high to help offset expenses. companies can concentrate on skimming strategies to generate high profits now or on penetration strategies to build market share and dominant the market for larger profits once the market stabilizes. Product Life Cycle Strategies Product Life-Cycle Strategies This CTR relates to the material on pp. 289 and 293.
  2. Product Life-Cycle Strategies This CTR relates to the material on pp. 289-290 and 293. Product Life-Cycle Strategies Growth. In this stage the company experiences both increasing sales and competition. Promotion costs are spread over larger volume and strategic decisions focus on growth strategies. Strategies include adding new features, improving quality, increasing distribution, and entering new market segments.
  3. Product Life Cycle Strategies Maturity. In this stage the company must manage slower growth over a longer period of time. Strategic decisions made in the growth stage may limit choices now. Marketing managers must proactively seek advantage by either market modification to increase consumption, product modification to attract new users (quality, feature, and style improvements), or marketing mix modification in an attempt to improve competitive position. Product Life-Cycle Strategies This CTR relates to the material on pp. 290-292 and 293.
  4. Product Life-Cycle Strategies This CTR relates to the material on pp. 292-293. Product Life Cycle Strategies Decline. In this stage the costs of managing the product may eventually exceed profits. Rate of decline is a major factor in setting strategy. Management may maintain the brand as competitors drop out, harvest the brand by reducing costs of support for short term profit increases, or drop the product (divest) altogether.