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  • 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.
  • 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.
  • 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.
  • 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.
  • Transcript

    • 1. Product Life Cycle Marketing Management
    • 2. Product Life Cycle: Implications for Business Strategy + 0 – Stage of the product life cycle Sales revenue or profit Introduction Growth Maturity Decline Total industry sales revenue Total industry profit
    • 3. Introduction Stage of the PLC 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
    • 4. Growth Stage of the PLC 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
    • 5. Maturity Stage of the PLC 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
    • 6. Decline Stage of the PLC 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
    • 7. PLC- Important Observations
      • Individual brands may not follow this pattern
        • Sometimes a product may crash and not get to the maturity stage
      • Product Life Cycle - length of time at each stage  - varies
        • depends on the products
        • can be a few months in each stage
        • or it can be years
      • Generally speaking, due to the 
        • Competitive Environment
        • Technological Environment
        • The PLC is getting shorter
    • 8. Extending Product Life Cycle
      • Market Modification:
        • Increase Frequency of use by Present Customers
        • Add New Users
        • Find New Users
      • Product Modification:
        • Change Product Quality or Packaging
    • 9. Intro Stage
      • Competitive   Situation
        • Monopoly or Monopolistic Competition  - your company has no competition because you originated the product first and are the first to get customers
      • Product:
        • One or a few number of people selling the product
      • Place:
        • Try to find good channels to get exposure - maybe offer exclusive distribution rights
      • Promotion:
        • AIDA begins - informative type ads
      • Price:
        • skimming or  penetration pricing
    • 10. Growth Stage
      • Competitive  Situation
        • Monopolistic Competition or Oligopoly  - once the market grows, other vendors will want to get involved so you will lose your monopoly position
      • Product:
        • There are several companies selling so there is competition to make the "best" product -many companies at this stage will add variations, color changes, and new FABs to the product to make it more competitive  - companies in the lead will also work to develop brand familiarity
      • Promotion:
        • Competitive ads
      • Price:
        • "meet the competition" pricing or price cutting
    • 11. Maturity/ Decline Stage
      • Competitive  Situation
        • Monopolistic Competition or Oligolpoly or Pure Competition  - more and more vendors get involved as more
        • companies learn to make the product and people try to "cash in" on the original idea 
        • - because there are so many vendors, the supply/demand situation will cause the price to drop and eventually the price will be so low, nobody will want to make the product anymore because it will be unprofitable
      • Product:
        • Several companies make the product - it will become a battle of the brands
      • Promotion:
        • Discount price oriented ads
      • Price:
        • Some companies drop out if they cannot afford to compete at a lower price