Product Life Cycle - Marketing Management

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Product Life Cycle - Marketing Management

  1. 1. PRODUCT PUBLISHING, DELIVERING AND MARKETING (MARKETING MANAGEMENT) SRI LANKA INSTITUTE OF INFORMATION TECHNOLOGY BSC (IT) SPECIALIZING IN MULTIMEDIA – FINAL YEAR VIDYAS G. IT 11 6086 46
  2. 2.  Product Life Cycle Shows the stages that products go through from development to withdrawal from the market
  3. 3.  A product is the item offered for sale. A product can be a service or an item.  The price that can be charged depends on the market, the quality, the marketing and the segment that is targeted.
  4. 4.  The Product Life Cycle (PLC) is used to map the lifespan of a product.  There are generally four stages in the life of a product.  These four stages are,     Introduction stage Growth stage Maturity stage Decline stage  The following graph illustrates the four stages of the PLC
  5. 5.  Not all products follow this cycle:  Fads  Styles  Fashions  The product life cycle concept can be applied to a:  Product class  Product form  Brand
  6. 6.      New Product Entrants Establishing Preference Competing in a Crowded Market Maintaining Awareness Backing Off and Starting Over
  7. 7.  The introduction stage of the product life cycle is where a new product is launched into a market.  Begins when the company develops a new-product idea  Sales are zero  Investment costs are high  Profits are negative
  8. 8.  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
  9. 9.  In the growth stage of the product life cycle, the market has accepted the product and sales begin to increase.  Low sales  High cost per customer acquired  Negative profits  Innovators are targeted  Little competition
  10. 10.  Product – Offer product extensions, service, warranty  Price – Penetration pricing  Distribution – Build intensive distribution  Advertising – Build awareness and interest in the mass market  Sales Promotion – Reduce expenditures to take advantage of consumer demand
  11. 11.  In the maturity stage of the product life cycle, sales will reach their peak.  Sales peak  Low cost per customer  High profits  Middle majority are targeted  Competition begins to decline
  12. 12.  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
  13. 13.  In the decline stage of the product life cycle, sales will begin to decline as the product reaches its saturation point.  Declining sales  Low cost per customer  Declining profits  Laggards are targeted  Declining competition
  14. 14.  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

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