Product life cycle

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Product life cycle

  1. 1.  Definition “Marketing is the performance of business activities that directs the flow of goods & services from the producer to the customer”
  2. 2.    Segmentation : Divide the market according to geographic , demographic etc Targeting-satisfy target group Positioning-Position the product in the minds of the customer.
  3. 3.     Price Promotion Place Product
  4. 4. Definition: “A product passes through certain distinct, in terms of usage ,demand, profitability and growth rate. This process is called the Product Life Cycle” 
  5. 5.  The Product Life Cycle (PLC) has Five Stages  Introduction  Growth Maturity  Decline  Milking 
  6. 6. Stages        Introduction Growth Maturity Decline Milking     Low sales High cost Negative profits Innovators are targeted Little competition Objective-product awareness
  7. 7.      Product – Offer a basic product Price – Use cost-plus basis to set Distribution – Build selective distribution Advertising – Build awareness among early adopters and dealers/resellers Sales Promotion – Heavy expenditures to create trial
  8. 8. PLC Stages    Introduction  Growth    Maturity Decline Milking    Rapidly rising sales High cost Rising profits Early adopters are targeted Growing competition
  9. 9.      Product – Offer product extensions, service, warranty Price – Penetration pricing Distribution – Build intensive distribution Advertising – Build awareness and interest in the mass market Sales Promotion –Heavy promotion advertisement.
  10. 10. Stages    Introduction Growth  Maturity    Decline Milking    Sales peak Low cost High profits Middle majority are targeted Competition begins to decline
  11. 11.      Product – Diversify brand and models Price – Set to match or beat competition Distribution – Build more intensive distribution Advertising – Stress brand differences and benefits Sales Promotion – Increase to encourage brand switching
  12. 12. Stages    Introduction Growth Maturity  Decline  Milking      Declining sales Low cost per customer Declining profits Laggards are targeted Declining competition
  13. 13.  Product – Phase out weak items  Price – Cut price    Distribution – Use selective distribution: phase out unprofitable outlets Advertising – Reduce to level needed to retain hard-core loyalists Sales Promotion – Reduce to minimal level
  14. 14. PLC Stages  Introduction Growth Maturity Decline Milking  In Milking the firm tries to extract as much as return as possible through heavy sales reduction offer. Implemented when the firm decide to stop or empty the stock.
  15. 15. THANK YOU

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