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product life cycle

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Plc

  1. 1. Product Life Cycle Amrapali Institute of Hotel Management 1
  2. 2. Product Life Cycle Def- Begins where a new product development ends. Product life cycle is the status of a product on time scale from introduction to end in terms of its sales & profits. A standard plc is explained as a bell shaped curve. Amrapali Institute of Hotel Management 2
  3. 3. Stages of Product Life Cycle Product development Introduction Growth Maturity Saturation Decline Amrapali Institute of Hotel Management 3
  4. 4. Product Development Begins when the company finds & develops a new product idea. During product development, sales are zero and the company’s investment costs add up. Amrapali Institute of Hotel Management 4
  5. 5. Introduction This stage is when a product is first offered in the market, it includes the following stages:2. Product not known to buyers, sales low3. Initial costs high4. Absence of Competition Amrapali Institute of Hotel Management 5
  6. 6. Introduction (contd)Specific marketing strategies are developed it includes: Product related Price related Place related Promotion related Amrapali Institute of Hotel Management 6
  7. 7. Marketing strategies for Introduction (contd) Product related- A product should be such that it cannot be easily copied. The patenting of the product or heavy investment on the product is done at that time. Amrapali Institute of Hotel Management 7
  8. 8. Marketing strategies for Introduction (contd) Price related- Premium or low prices are set. High prices help in quick recovery of costs & low prices discourage competitions Amrapali Institute of Hotel Management 8
  9. 9. Marketing strategies for Introduction (contd) Place related- Distribution channel offers easy access to target markets. Amrapali Institute of Hotel Management 9
  10. 10. Marketing strategies for Introduction (contd) Promotion Related- Promotion is kept high to gain the attention of the market & the focus is on creating awareness. Amrapali Institute of Hotel Management 10
  11. 11. GrowthAwareness of the product is increased & it starts gaining acceptance. It features: Competitors joining in Awareness increases Promotion shifts to fighting competitions Sales & profits start increasing. Amrapali Institute of Hotel Management 11
  12. 12. Marketing strategies for Growth stage Product related- Small modifications or additions to the product Price related- Prices modified in view of competition Place related- few more channels added Promotion related- promotion high & competitive Amrapali Institute of Hotel Management 12
  13. 13. Maturity StageFeatures include: Market becomes fully aware Competition becomes intense Sales & profits continue to increase as market is still growing. Amrapali Institute of Hotel Management 13
  14. 14. Marketing Strategies in maturity stage Product related- modifications & additions continue Price related: modified & reduced in view of competition. Place related: channels increased to reach the market Promotion related: high & competititve Amrapali Institute of Hotel Management 14
  15. 15. SaturationFeatures include: Market becomes stable New competitors do not enter the market Sales stabilize Profits start going down, because of heavy cost of competition. Amrapali Institute of Hotel Management 15
  16. 16. Decline StageFeatures include: Market loses interest in the product Profit & sales decline Marketers plan exit strategies from the market. Amrapali Institute of Hotel Management 16
  17. 17. Marketing strategies in decline stage Shut Shop & Leave: close business & leave the market Stay on: Stay on in the hope that others will leave the market Milking: Some marketers keep operating & stop all expenditures Amrapali Institute of Hotel Management 17
  18. 18. Second Life cycleThis strategy often used by multinational companies strategies include: Finding a new use of the productIn this stage the product begins its journey again from introduction & continues with the same process. Amrapali Institute of Hotel Management 18
  19. 19. Product Deletion It is stage is in which the product is deleted from the market, as it becomes obsolete, lose their attractiveness in the market place, & have to be replaced. Amrapali Institute of Hotel Management 19
  20. 20. Methods of product deletion Phase- out Run-out Drop Amrapali Institute of Hotel Management 20
  21. 21. Methods of Product deletion (contd) Phase-out- It enables a product to be removed in an orderly fashion. For example a menu item would be replaced on the next revision of the menu. A Run-out- would be used when sales for an item is low & costs exceed revenue. Drop- this option is usually chosen when a product may cause customer harm or dissatisfaction. Amrapali Institute of Hotel Management 21

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