2. WHAT IS A PRODUCT?
FELT DEPRIVEMENTS OF
LIFE-FOOD , CLOTHING &
SPECIFIC NEEDS E.G.
BISLERI, PIZZA ETC.
DESIRES NEEDS AND
WANTS BACKED BY
A SUMMATION OR BUNDLE OF
NEED SATISFYING ENTITY
4. PRODUCT LIFE CYCLE
The product life cycle is an important
concept in marketing. It describes the stages
a product goes through from when it was
first thought of until it finally is removed from
the market. Not all products reach this final
stage. Some continue to grow and others
rise and fall.
5. The Product Life Cycle.
A new product progresses through a
sequence of stages from introduction to
growth, maturity, and decline. This sequence
is known as the product life cycle
It is associated with changes in the
marketing situation, thus impacting the
marketing strategy and the marketing mix.
6. Philip Kotler :”The product life cycle is an attempt to
recognize distinct stages in sales history of the product.”
Product life cycle is the historical study of (sales of) the
product. It includes when it was introduced; when it was
getting rapid acceptance; when it was on the peak of its
position; when it started falling from the peak; and when it
disappeared. Product passes through certain stages
during its life span.
In fact, no product is capable to satisfy needs and wants
of consumers for an unlimited period of time. As such, its
sales and profits are subject to differ over time. The life of
product can be determined by its capacity to meet market
expectations. It lasts or exists as long as it satisfies its
9. STAGES OF PRODUCT LIFE CYCLE:
Product life cycle comprises of four
steps/stages. Each stage of product life cycle
can be characterized in terms of at least four
aspects – sales volume, amount of profits,
level of promotional efforts and expenses,
and degree of competition. Each stage
demands the unique marketing strategy. Let
us briefly describe each of the stages of the
10. INTRODUCTION STAGE:
Introduction stage starts when a new product is, for
the very first time, made available for purchase.
Consumers are not aware of product, or they may not
have general opinion and experience regarding
product. Moreover, a new product has to face the
existing products. So, the sales remain limited.
In the very initial stage, there is loss or negligible
profit. During this period, the direct competition is
almost absent. Company has not mastered
production and selling problems. Price is normally
high to recover/offset costs of development,
production, and marketing with minimum sales. So,
sales rise at gradually.
11. CHARACTERISTICS OF INTRODUCTION STAGE INCLUDE:
(i) Huge selling and promotional costs are
required to increase awareness of customers.
(ii) Price is kept high to recover high development,
production, and marketing costs.
(iii) Marketer has to tackle technical and
(iv) Sale is low and increasing at a lower rate.
(v) There is loss or negligible profit.
(vi) There is no competition
12. GROWTH STAGE:
This is the stage of a rapid market acceptance. Due to
increased awareness, the product gets positive response
from market. This stage is marked by a rapid climb in
sales. Sales rise at the increasing rate. Profits follow the
sales. Seller shifts his promotional attempts from “try-my-
brand” to “buy-my-brand.”
Company tries to develop effective distribution network.
Here, the most of production and marketing problems are
mastered. Due to rise in profits, competitors are
attracted. At a right time, price may be reduced to attract
the price-sensitive buyers.
Company continues, even increases, its selling and
promotional efforts to educate and convince the market
and meet competition. At the end of growth stage, sales
start increasing at decelerated rate, consequently, profits
starts to decline.
13. CHARACTERISTICS OF GROWTH STAGE INCLUDE:
(i) Sales increase rapidly (or at increasing rate) as a
result of consumer acceptance of the products.
(ii) Company can earn maximum profits.
(iii) Competitors enter the market due to attractive
(iv) Price is reduced to attract more consumers.
(v) Distribution network is widened and improved.
(vi) Necessary primary changes are made in product to
(vii) Company enters the new segments and new
channels are selected.
14. MATURITY STAGE:
This stage is marked with slow down of sales
growth. Sales continue to rise but at
decreasing rate. Competitors have entered
the market and existing products face
severe competition. Sales curve is pushed
downward. It is just like an inverse “U.”
During this stage, for certain period of time,
sales remain stable. This level is called the
Saturation. Profits also decline. Normally,
this stage lasts longer and marketers face
15. CHARACTERISTICS OF MATURITY STAGE INCLUDE:
i. Sales increase at decreasing rate.
ii. Profits start to decline.
iii. Marginal competitors leave the market.
iv. Customer retention is given more emphasis.
v. Product, market, and marketing mix
modifications are undertaken.
16. DECLINE STAGE:
This is the last stage of product life cycle. Here,
sales start declining rapidly. Profits also start
erasing. There is a minimum profit or even a little
loss. Advertising and selling expenses are
reduced to realize some profits. This stage is faced
by only those who survived in maturity stage.
Most products obsolete as new products enter
the market. All products have to face the stage
earlier or later. New products start their own life
cycle and replace old ones. A number of
competitors withdraw from the market. Those
who remain in the market prefer to drop smaller
segments, make minor changes in products, and
continue selling the products in profitable
segments and channels.
17. Here, logic has its own role. Management
continues with the same product with
expectation that sales improve when economy
improves; marketing strategy is revised
expecting that competitors will leave the
market; or product is improved to attract new
However, unless a strong reason exists, it is
costly and risky to continue with the same
products. Later on it is difficult of manage
selling and promotional efforts. Marketer must
check every possibility before dropping the
18. CHARACTERISTICS OF DECLINE STAGE INCLUDE:
i. Sales fall rapidly.
ii. Profits fall more rapidly than sales.
iii. Product modification is adopted.
iv. Gradually, the company prefers to shift
resources to new products.
v. Most of sellers withdraw from the market.
vi. Promotional expenses are reduced to
realize a little profit.
19. HIERARCHIES OF A PRODUCT/ANATOMY OF A
PRODUCT /LEVELS OF A PRODUCT
20. CORE PRODUCT/ CORE BENEFIT
The fundamental or the basic benefit or the
attribute for which the customer buys the
product is called its core benefit.
1. The buyer of a washing machine actually
buys cleanliness of clothes.
2. A customer in an hotel pays fundamentally
for rest and sleep.
21. BASIC PRODUCT
At this level, the marketer turns the core benefit
into a basic product.Thus a washing machine
includes features such as care for clothes,
conviniencein washing, manageable size ,
durability of the machine etc. apart from core
22. EXPECTED PRODUCT/ACTUAL PRODUCT
Over and above the basic product the
customers expect some additional attributes or
benefits when they buy the product.
Adding benefits over a basic product, gives birth
to expected product or the actual product.
Customers buy washing machines also expect
lesser noise at the time of its operation, minimum
vibration, different modes for different types of
clothes(woolen, delicate, cotton etc. ),they look for
fully automatic, semi automatic etc.
23. AUGMENTED PRODUCT
As inter firm rivalry increases the marketers try
to find out some benefits or attributes that go
beyond the normal expectations of customers
but can add some value to the product offer.
These value enhancements results in
For example in case of washing machines
options of hot, cold and warm water are present
or quick normal and strong wash options etc.
24. In developed or developing countries
competition takes place in product
augmentation level, but in less developed or
under developed countries it is mainly at the
expected level, like in India some companies
offer same product at different levels- like
some models in lower price range and some
models in higher price range.
25. POTENTIAL PRODUCT
When manufacturers add future compatibility to
products we get this level of potential product.
Benefits are added not only to satisfy them but to
provide delight or surprise them.
1. for washing machines smart diagnosis where the
executives can solve many problems by hearing the
sound of the machine over phone
2. Censor enabled doors
3. Smart phone connected geasers
4. Wi-fi enabled printers.