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- 2. PRODUCT LIFE CYCLE Submitted by , Resal Mani S7 Mechanical Mangalam college 2 Guided by, Mr.Tinu Thomas Asst.Professor Mangalam college of Engg. Ettumanoor.
- 3. DEFENITION “The PRODUCT LIFE CYCLE is a series of STAGES that a product goes through from when a business first creates and sells it until the time nobody wants it any more.” 3
- 4. PRODUCT LIFE CYCLE STAGES The product life cycle diagram shows that four stages exist in the ‘working life’ of most products. PRODUCT LIFE CYCLE DIAGRAM 4
- 5. STAGE 1 PRODUCT INTRODUCTION • Costly stage as lots of advertising and promotion is needed to encourage sales. • SALES will start to RISE SLOWLY as people become aware of the product. • PROFITS will start to APPEAR SLOWLY as sales rise and start up costs are repaid 5
- 6. FEATURES • High failure rates • Little competition • Frequent product modification • Limited distribution • High marketing and production costs • Negative profits • Promotion focuses on awareness and information • Intensive personal selling to channels 6
- 7. STAGE 2 PRODUCT GROWTH • SALES will start to RISE QUICKLY as many people begin to use the product. • PROFITS will start to RISE QUICKLY as sales rise sharply. 7
- 8. FEATURES • Increasing rate of sales • Entrance of competitors • Market consolidation • Initial healthy profits • Promotion emphasizes brand ads • Goal is wider distribution • Prices normally fall • Development costs are recovered 8
- 9. STAGE 3 PRODUCT MATURITY • SALES will start to SLOW DOWN as almost everyone who wants the product will have it. • PROFITS will be MAXIMISED as the maximum number of sales is made. 9
- 10. FEATURES • Declining sales growth • Saturated markets • Extending product line • Stylistic product changes • Heavy promotions to dealers and consumers • Marginal competitors drop out • Prices and profits fall • Niche marketers emerge 10
- 11. STAGE 4 PRODUCT DECLINE • SALES will start to FALL as people start to use other better or newer products. • PROFITS will start to FALL as sales fall. At this stage a decision has to be made about whether to withdraw the product or use extension strategies to inject new life into the product. 11
- 12. FEATURES • Long-run drop in sales • Large inventories of unsold items • Elimination of all nonessential marketing expenses 12
- 13. How stages of the product lifecycle relate to firm’s marketing objectives & marketing mix actions Introduction Growth Maturity Decline Product strategy Limited models frequent changes More models frequent changes Large number Of models Eliminate unprofitable outlets Distribution strategy Limited whole sale retail distribution Expanded dealers .Long term relations Extensive margins drop Shelf space Phase out unprofitable outlets Promotion strategy Awareness stimulate demand Aggressive ads stimulate demands Advertise promote heavily Phase out promotion Pricing strategy Higher development costs Fall as result of competition & efficient production Prices fall Prices stabilize at low level 13
- 14. Extension Strategies The marketing mix can be changed to inject new life into a product by: • Changing or modifying the PRODUCT • Altering the distribution pattern (PLACE) • Changing the PRICE • Using a new PROMOTIONAL campaign These methods can delay the replacement or withdrawal stage for some time 14
- 15. LIFE CYCLE VARIATIONS The speed at which different products move through the life cycle will vary, and some never seem to complete their life cycle at all Eg: Cadbury’s Dairy Milk was introduced in 1905 and is still going strong! This tends to be because the product has a strong brand and a loyal customer base. 15
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