2. Marketing Objectives
▶ For a business to effectively carryout their marketing objectives…
▶ It must be aware of how its’ products interact with their marketing mix
▶ Current and anticipated stages of its’ products in their life cycle
▶ And strategies for extending the product life cycle
3. Product Life Cycle
▶ The Product Life Cycle consists of 6 stages
1. Development
2. Introduction
3. Growth
4. Maturity
5. Saturation
6. Decline
4. Product Life Cycle Stage | Development
▶ Product opportunities are developed by identifying gaps in the market,
research, brainstorming, and by improving existing products
▶ The product is being designed at this point
▶ Consumers will be surveyed to determine sufficient demand
▶ If there is sufficient demand, a prototype will be developed for testing
▶ Significant cost may be incurred during the development stage
5. Product Life Cycle | Development
▶ Consumers will be surveyed to determine sufficient demand
▶ If there is sufficient demand, a prototype will be developed for testing
▶ Significant cost may be incurred during the development stage
Many prototypes never leave the
development stage, such as this prototype
touchscreen Apple phone from 1983.
“Prototype Apple phone from the 1980s” by
Ian Lamont is licensed under CC BY 2.0
6. Product Life Cycle | Development
▶ Test Marketing
▶ Representative market areas are identified for product testing
▶ Testing may result in the product being altered before mass introduction
▶ Safety and reliability is continued to be assessed at this stage
7. Product Life Cycle | Introduction
▶ A product will move beyond prototype and be introduced to consumers
▶ New products will be introduced to consumers using promotional strategies to
create product awareness
▶ Attracting early product adopters may be critical at this stage
“Marketing Product Lifecycle 2” by Jen
Beever is licensed under CC BY-NC 2.0
8. Product Life Cycle | Growth
▶ As product awareness increases, demand will increase
▶ Promotional strategies should be used to continue rapid growth in sales
▶ A product is considered to be established at this point
9. Product Life Cycles | Growth
▶ Product Fads
▶ Following significant growth, a product can experience immediate and
significant decline without a strong maturity stage
▶ Products that experience this type of rapid
growth and decline are considered fads
▶ Some fad products may be able to re-enter
the market at another time
▶ Brief fashion trends may often be
considered fads
“Snuggie Talie” by Olivier Hill is
licensed under CC BY-NC-SA 2.0
10. Product Capacity
▶ Following Product Introduction, and
during the Growth Stage, a business
must be working to increase
manufacturing capacity
▶ During the Growth Stage, demand
may increase suddenly
▶ In order to meet increased demand,
a business should have additional storage,
manufacturing, and distribution capacity
▶ If a business is unable to meet increased
demand, consumer frustration can stymie demand
“Mediq Sverige Kungsbacka warehouse” by
Gwan Kho is licensed under CC BY-SA 2.0
11. Economies of Scale
▶ During market growth, businesses may experience economies of scale
▶ Economies of scale is when a business is able to leverage its assets to
decrease a product’s average cost of production and distribution
▶ For example, the capacity of transportation
is maximized, reducing the transportation
cost per item
“Chinese truck” by Jakob Montraslo
is licensed under CC BY 2.0
12. Diseconomies of Scale
▶ During product and business growth, a business may experience an increase in
a product’s average cost of production and distribution
▶ This may be caused by communication, distribution, and other logistical
issues as a result of growth
13. Product Life Cycle | Maturity
▶ Sales growth will slow and plateau during this stage
▶ Ideally, the product will be unique in the marketing with no, or little direct
competition
▶ A well established product at this stage is
desirable, as it can provide a business with
a stable source of income with less
marketing effort
▶ Dawn dish soap, a Procter & Gamble product,
has been around since 1973, and is considered
a leader in its market
“PICT0087” by f_lodinea is licensed
under CC BY-NC 2.0
14. Product Extension Strategies
▶ When a product begins to show signs of decline in its life cycle a business may
engage in product extension strategies
▶ Extension Strategies are used to extend the life cycle of a product
▶ Extension Strategies may include
▶ Alternate uses
▶ Example: Teflon, a product developed by DuPont,
was first used for artillery fuses. After WWII, DuPont
found an alternate use for Teflon, non-stick pans.
▶ Target marketing
▶ Altering components or appearance
▶ Engaging in a promotional push to attract
new customers
“1975 Ad, Du Pont Teflon Cookware, “The Clean Winner””
by Classic Film is licensed under CC BY-NC 2.0
15. Product Life Cycle | Saturation
▶ New businesses will slowly enter the marketing with competing products
▶ As businesses enter the market with competing products that offer greater
value or a lower price that market becomes saturated
▶ Businesses must differentiate their products to maintain sales
16. Product Life Cycle | Decline
▶ Product sales decline as a result of
▶ Changes in product technology in the market
▶ New product offers
▶ Changes in social product taste
New product technology, the MP3
player, caused the decline of the
Discman.
“Discman” by mpolla is licensed
under CC BY-NC-SA 2.0
