Foundation First - Why Your Website and Content Matters - David Pisarek
Pdlc
1. PRODUCT DEVELPOMENT LIFE
CYCLE
Product Life Cycle (PLC):The Product Life Cycle (PLC) is based
upon the biological life cycle. For example, a seed is planted
(introduction); it begins to sprout (growth); it shoots out leaves
and puts down roots as it becomes an adult (maturity); after a
long period as an adult the plant begins to shrink and die out
(decline).
Each product may have a different life cycle
PLC determines revenue earned
Contributes to strategic marketing planning
May help the firm to identify when
a product needs support, redesign, reinvigorating, withdrawal,
etc.
May help in new product development planning
May help in forecasting and managing cash flow
2. Product Life Cycle
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.
The five stages of each product lifecycle are
product development, introduction, growth,
maturity and decline.
3. PRODUCT DEVELOPMENT STAGE
Begins when the company develops a new-
product idea
Sales are zero
Investment costs are high
Profits are negative
Innovators are targeted
4.
5. INTRODUCTION STAGE
Low sales
High cost per customer acquired
Negative profits
Little competition
Early adopters are targeted
6. Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers
Characteristics of INTRODUCTION
stage
7. GROWTH STAGE
Rapidly rising sales
Average cost per customer
Rising profits
Early majority are targeted
Growing competition
8. Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,
warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the
mass market
Characteristics of GROWTH stage
9. MATURITY STAGE
Sales peak
Low cost per customer
High profits
Late majority are targeted
Competition begins to decline
10. Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defending
market share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
Characteristics of MATURITY stage
11. DECLINE STAGE
Declining sales or dip in sales
Low cost per customer
Declining profits
Laggards are targeted
Declining competition
12. Characteristics of DECLINE stage
Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk the brand
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitable
outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
13. Example: New Flavor of Pepsi
Stage 1: Market Introduction
Pepsi bottles the new flavored product and places it
on the market for consumers.
Pepsi also spends a lot of money advertising the new
flavor creating awareness.
Stage 2: Market Growth
Customers like the flavor and begin to make routine
purchases.
Coke introduces their competing flavor.
14. Stage 3: Market Maturity
More competitors enter the market taking some of
Pepsi’s profits.
Stage 4: Sales Decline
Customers have moved on to the next new flavor.
Some loyal fans stay behind.
16. Continued…
A Style is a basic and distinctive mode of
expression appearing in a field of human
endeavor. Styles appear in homes, clothing,
art etc.
A Fashion is a currently accepted or popular
style in a given field. Fashion pass through
four stages: Distinctiveness, emulation,
mass fashion, decline.
Fads are fashions that comes quickly into
public view , are adopted with great zeal,
peak early, and decline very fast.
Hinweis der Redaktion
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
This CTR relates to the material on pp. 289-290 and 293.
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. 292-293.