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Product Life Cycle Stages Explained
- 3. This initial stage require significant investment ProductLifeCycleStages.com
- 4. Challenges of the Introduction Stage ◦ Small or no market: start with low sales ◦ High costs: invest in R&D, marketing and promotion ◦ Losses, Not Profits: negative profits Benefits of the Introduction Stage ◦ Limited competition: the lack of direct competition is an advantage ◦ High Price: new product price can be above market price ProductLifeCycleStages.com
- 5. Product Life Cycle Management ◦ All about building the demand and establishing the market ◦ Emphasis on promotion, production and developing distribution channel Photo: flickr/AlainDurand ProductLifeCycleStages.com
- 6. The key stage for: ◦ Establishing a product’s position ◦ Increasing sales and ◦ Improving profit margins Requires: ◦ Development of consumer demand ◦ Reduction of manufacturing costs ProductLifeCycleStages.com
- 7. Challenges of the Growth Stage ◦ Increasing Competition: from new manufacturers ◦ Lower Prices: to achieve the desired increase in sales ◦ Different Marketing Approach: to make the most of the growth potential Benefits of the Growth Stage ◦ Costs are Reduced: through economies of scale ◦ Greater Consumer Awareness: leads to the sales increase ◦ Increase in Profits: both in overall amount and profit margin ProductLifeCycleStages.com
- 8. Product Life Cycle Management ◦ Typically profits are highest during the Growth stage ◦ Necessary to reinvest in marketing and promotional activity Photo: flickr/Promoview Marketing Promocional ProductLifeCycleStages.com
- 9. The primary focus is to maintain market share ProductLifeCycleStages.com
- 10. Challenges of the Maturity Stage ◦ Sales Volumes Peak: the market becomes saturated ◦ Decreasing Market Share: challenge to maintain market share ◦ Profits Start to Decrease: less market share, less profit Benefits of the Maturity Stage ◦ Continued Reduction in Costs: economies of scale & production efficiency ◦ Increased Market Share Through Differentiation: innovative marketing campaigns or diverse product features ProductLifeCycleStages.com
- 11. Product Life Cycle Management ◦ Innovation will maintain or even increase market share Photo: flickr/Vermin Inc ProductLifeCycleStages.com
- 12. Demonstrated by the fall in both sales and profits Opportunities to continue making profit ProductLifeCycleStages.com
- 13. Challenges of the Decline Stage ◦ Market in Decline: difficult to prevent ◦ Falling Sales and Profits: to slow this fall by trying and increasing market share ◦ Product Withdrawal: before losing money Benefits of the Decline Stage ◦ Cheaper Production: if able to reduce costs ◦ Cheaper Markets: to look to new, cheaper markets ProductLifeCycleStages.com
- 14. Product Life Cycle Management ◦ In the Decline stage, a product can still be viable ◦ Successful manufacturers focus on effective product life cycle management Photo: flickr/Michael P. Whelan ProductLifeCycleStages.com