Product life cycle and product extension strategies.

1. Product Life Cycle

2. New product progresses through a sequence of stages from introduction to growth, maturity
and decline. This sequence is known as the product life cycle. This impacts the marketing mix;
the 4ps (product, price, place and promotion).

3. Introduction Growth Maturity Decline
Product Only a basic model of
the product is available
Changes might be
made to the product as
a result of feed back
from consumers in the
test market
Extension strategies
might be used to keep
the product in this, the
most profitable stage of
its life cycle
The product and
packaging is not altered
Price Prices might lower than
competitors prices to
attract consumer
Brand image helps to
create customer loyalty
Price will remain similar
to that of competitor
products
The price might be
reduced to maintain sales
or sell off the remaining
stock before withdrawing
the product
Promotion High promotional
activity
Promotional activity still
high to continue
persuading customers
Promotional activities are
aimed at reminding the
customers that the
products are still available
Advertise the products at
a lower price
Place The product may be
offered for sale in
specially selected
outlets
The product is more
widely available, which
helps to increase sales
The product is now
available for purchase
through a wide
distribution network
The product is only
available in profitable
outlets

4. Extending the product life cycle.
Businesses can often sell old products or services to new market.
This can be mainly because the product has become mature in the domestic market and
demand is declining.
This way the businesses can sell an old idea in to new places and there is no additional
research and development cost.