This document discusses the traditional product life cycle model which consists of 5 stages: introduction, growth, maturity, decline, and decision point. It provides examples for each stage. The introduction stage involves low sales and high promotion costs to build awareness. The growth stage sees rapid sales increases as more people learn about the product. The maturity stage is when sales level off and competition increases, driving down prices. The decline stage is when sales begin to fall as new products replace the old. At the decision point, companies must decide whether to reformulate, discontinue, or find new uses for the product.

1. IDC 4O: Sports and
Entertainment
Marketing
Chapter 5:
Product and Price Decisions: Sports

2. Product Life Cycle
 The traditional product life cycle consists of
5 parts: product
introduction, growth, maturity, decline, and
decision point

3. Introduction Stage
 Sales are low as the new idea is first introduced to
the market.
 Customers may not be aware of the product’s
benefits and features and may not be aware of
the product itself.
 Most companies experience losses during the
market introduction stage.
 A lot of money is spent on promotion and product
development to build product awareness.
 Promotion is aimed at innovators and early adopters.
 Example: Tablet/Phones, Schticky,

4. Growth Stage
 Rapid growth in sales and profits
 More product awareness
 Competitors see the opportunity and enter the
market.
 Some competitors will copy the product or may try to
make it better or more appealing to other target markets.
 The new entries result in more product variety.
 Promotion is aimed at a broader audience.
 More distribution channels are established
Example: SmartPhones, 3d Tv’s, BluRay
players, HDTV

5. Maturity Stage
 Sales begin to level off.
 The competition gets tougher as more
competitors have entered the market.
 Increased competition creates a downward
movement in prices.
 Industry profits are largest, but it is also when
industry profits begin to decline.
 Promotion is targeted to create brand
differentiation.
Example: Coca-Cola, Fibreglass Hockey sticks,

6. Decline Stage
 Sales begin to decline.
 New products replace the old.
 Firms will often try to use extension
strategies.
 Companies may be able to keep some
sales by appealing to their most loyal
customers.
Example: SUV’s, DVD’s, WII,

7. Decision Point
 May decide to reformulate, repackage or
reintroduce a “new and improved” product
 New promotions and pricing
 Enhance the product by finding new uses
or by adding new features.
 Discontinue: sell the product to another
firm, or liquidate inventory
Example: VCR, Tube TV, DVD’s