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product development life cycle, introduction ,growth,maturity,decline

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PRODUCT DEVELPOMENT LIFE
CYCLE
 Product Life Cycle (PLC):The Product Life Cycle (PLC) is based
upon the biological life cycle. For example, a seed is planted
(introduction); it begins to sprout (growth); it shoots out leaves
and puts down roots as it becomes an adult (maturity); after a
long period as an adult the plant begins to shrink and die out
(decline).
 Each product may have a different life cycle
 PLC determines revenue earned
 Contributes to strategic marketing planning
 May help the firm to identify when
a product needs support, redesign, reinvigorating, withdrawal,
etc.
 May help in new product development planning
 May help in forecasting and managing cash flow
Product Life Cycle
Product life cycle is the course of a product’s
sales and profits over time.
Product life cycle(PLC) deals with the life of a
product in the market with respect to
business or commercial costs and sales
measures.
The five stages of each product lifecycle are
product development, introduction, growth,
maturity and decline.
PRODUCT DEVELOPMENT STAGE
 Begins when the company develops a new-
product idea
 Sales are zero
 Investment costs are high
 Profits are negative
 Innovators are targeted
Pdlc
INTRODUCTION STAGE
 Low sales
 High cost per customer acquired
 Negative profits
 Little competition
 Early adopters are targeted
Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers
Characteristics of INTRODUCTION
stage
Ad

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Pdlc

  • 1. PRODUCT DEVELPOMENT LIFE CYCLE  Product Life Cycle (PLC):The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).  Each product may have a different life cycle  PLC determines revenue earned  Contributes to strategic marketing planning  May help the firm to identify when a product needs support, redesign, reinvigorating, withdrawal, etc.  May help in new product development planning  May help in forecasting and managing cash flow
  • 2. Product Life Cycle Product life cycle is the course of a product’s sales and profits over time. Product life cycle(PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline.
  • 3. PRODUCT DEVELOPMENT STAGE  Begins when the company develops a new- product idea  Sales are zero  Investment costs are high  Profits are negative  Innovators are targeted
  • 5. INTRODUCTION STAGE  Low sales  High cost per customer acquired  Negative profits  Little competition  Early adopters are targeted
  • 6. Sales Costs Profits Marketing Objectives Product Price Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers Characteristics of INTRODUCTION stage
  • 7. GROWTH STAGE  Rapidly rising sales  Average cost per customer  Rising profits  Early majority are targeted  Growing competition
  • 8. Sales Costs Profits Marketing Objectives Product Price Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market Characteristics of GROWTH stage
  • 9. MATURITY STAGE  Sales peak  Low cost per customer  High profits  Late majority are targeted  Competition begins to decline
  • 10. Sales Costs Profits Marketing Objectives Product Price Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Distribution Build more intensive distribution Advertising Stress brand differences and benefits Characteristics of MATURITY stage
  • 11. DECLINE STAGE  Declining sales or dip in sales  Low cost per customer  Declining profits  Laggards are targeted  Declining competition
  • 12. Characteristics of DECLINE stage Sales Costs Profits Marketing Objectives Product Price Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers
  • 13. Example: New Flavor of Pepsi  Stage 1: Market Introduction  Pepsi bottles the new flavored product and places it on the market for consumers.  Pepsi also spends a lot of money advertising the new flavor creating awareness.  Stage 2: Market Growth  Customers like the flavor and begin to make routine purchases.  Coke introduces their competing flavor.
  • 14.  Stage 3: Market Maturity  More competitors enter the market taking some of Pepsi’s profits.  Stage 4: Sales Decline  Customers have moved on to the next new flavor.  Some loyal fans stay behind.
  • 16. Continued… A Style is a basic and distinctive mode of expression appearing in a field of human endeavor. Styles appear in homes, clothing, art etc. A Fashion is a currently accepted or popular style in a given field. Fashion pass through four stages: Distinctiveness, emulation, mass fashion, decline. Fads are fashions that comes quickly into public view , are adopted with great zeal, peak early, and decline very fast.

Editor's Notes

  1. Introduction. In this stage marketers spend heavily on promotions to inform the target market about the new product's benefits. Low or negative profits may encourage the company to price the product high to help offset expenses. companies can concentrate on skimming strategies to generate high profits now or on penetration strategies to build market share and dominant the market for larger profits once the market stabilizes.
  2. Product Life-Cycle Strategies This CTR relates to the material on pp. 289-290 and 293.
  3. Product Life Cycle Strategies Maturity. In this stage the company must manage slower growth over a longer period of time. Strategic decisions made in the growth stage may limit choices now. Marketing managers must proactively seek advantage by either market modification to increase consumption, product modification to attract new users (quality, feature, and style improvements), or marketing mix modification in an attempt to improve competitive position.
  4. Product Life-Cycle Strategies This CTR relates to the material on pp. 292-293.