ppt slides created and copyright by prof. tim richardson www. witiger. com product life cycle slide...

ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com

Product Life

Cycle

Slide 1


Product Life

Cycle

Slide 2

PLC - Product Life Cycle

• The purpose of having a diagram is to help you understand the changes, in the revenue that is made, as you go through the different stages of selling a product, from the beginning, to the end.


Product Life

Cycle

Slide 3

Stages in the Product Life Cycle

Introduction Growth Maturity Decline

The time at each stage varies greatly

36 in 8th Edition

Page 260 in 9th Edition

DVD

Mini-discElectric cars

VR*

*= virtual reality

Digital cameras


Product Life

Cycle

Slide 4



Introduction

The seller tries to stimulate demand

Promotion campaigns to get increase public awareness

Explain how the product is used,

• Features Advantages Benefits

You will lose money, but you expect to make profits in the future


Product Life

Cycle

Slide 5



Introduction

•Sales are low, and profits are below the line because your costs are greater than the amount of money you make

•you have “negative” profit

•Need to spend a lot of money on promotion


Product Life

Cycle

Slide 6



Growth

A lot is sold - The seller tries to sell as much as possible

Other competitor companies watch, and decide about joining in with a competitor product

“success breeds imitation” (Text)

Growth will continue until too many competitors in the market - and the market is saturated


Product Life

Cycle

Slide 7



Growth

•At the end of the growth stage, profits start to decline when competition means you have to spend more money on promotion to keep sales going.

•Spending money on promotion cuts into your profit


Product Life

Cycle

Slide 8



Maturity

Many competitors have joined - the market is saturated

The only way to sell is to begin to lower the price - and profits decrease

It is difficult to tell the different between products since most have the same F.A.B. - Features, Advantages & Benefits

Competition can get “Nasty” and commercials are intense


Product Life

Cycle

Slide 9



Maturity

“Persuasive Promotion” becomes more important during this stage

That is to say, you have commercials almost begging the customer to still buy your product because you still make it just as good.


Product Life

Cycle

Slide 10



Decline

Newer products are now more attractive - even a low low price does not make consumers want to buy.

Profit margin declines - and so the only way to make money is to sell a high volume


Product Life

Cycle

Slide 11



Decline

To increase volume you try to

1. Increase the number of customers - get new customers

2. Increase the amount each customer uses

Extending the

Product Life

Cycle


Product Life

Cycle

Slide 12

1. Increase frequency of use by present customers

2. Add new users

3. Find new uses

4. Change product quality or packaging

Extending the Product Life Cycle

Market Modification

Product Modification

Purpose: to sell more product and cover original investment


Product Life

Cycle

Slide 13

Extending the product Cycle

• to prevent the product going into to prevent the product going into decline you modify the marketdecline you modify the market

MARKET MODIFICATIONMARKET MODIFICATION • you look for new consumers by changing

the product so it has new users - and then new customers (Baking soda, vinegar, (Baking soda, vinegar, Q-tips,Q-tips, Avon Skin So Soft, vaseline Avon Skin So Soft, vaseline

Examples from

class


Product Life

Cycle

Slide 14


• MARKET MODIFICATIONMARKET MODIFICATION

examples

Windex for cleaning jewelry

Javex bleach for toilets

Lemons for hair colouring

beer for hair

Bounce for in the garbage, gym bag etc.

Examples from

class


Product Life

Cycle

Slide 15

• to prevent the product going into to prevent the product going into decline you modify the productdecline you modify the product PRODUCT MODIFICATIONPRODUCT MODIFICATION

• adding new features, variations, model varieties will change the consumer reaction - create more demand

• therefore you attract more users


Exam

ples

from

cla

ss


Product Life

Cycle

Slide 16

• PRODUCT MODIFICATIONPRODUCT MODIFICATION

• examples

• condoms - colours, features

• CD players

• chip flavours - many kinds

• flavoured tongue depressors

• couples seats at movie theatre


Exam

ples

from

cla

ss


Product Life

Cycle

Slide 17

• PRODUCT MODIFICATIONPRODUCT MODIFICATION

• examples continued

• digital sound at theatres


Exam

ples

from

cla

ss


Product Life

Cycle

Slide 18

Overlap of Life Cycle for Products A and B

WINDOWS 95

1991 1995 1996 1997

WINDOWS 3.1


Product Life

Cycle

Slide 19

Most people have a problems thinking this theory is relevant because they apply it to specific product brands - it should be applied only to a general product category


Product Life

Cycle

Slide 20

Length of Cycle Stages

• Products move through the cycle at different speeds

• sometimes introduction is very long, or very short, depending on how easy it is for the public to understand the F.A.B.

• Not all products follow the same pattern


Product Life

Cycle

Slide 21

Life Cycle Length

• Some products move very fast because they are new and have no competition so the intro stage is short, and they go direct to growth stage.


Product Life

Cycle

Slide 22

Life Cycle Length

Because of• technology and• globalization• the introduction stage is getting very

short• some cycles more quickly to maturity,

then have many product modifications so the decline stage drags on and on


Product Life

Cycle

Slide 23

Speed of the PLC• Since the Intro Stage is getting shorter,

and sometimes the Growth Stage doesn’t last too long (because competitors move in) companies must continually come up with new products

• You can tell when they are in the growth stage because this is when they introduce new model variations, and some improvements to the productPage 340


Product Life

Cycle

Slide 24

Alternative Product Life Cycles

TamagachiPocket pagers

Failures that do not go through the 4 steps


Product Life

Cycle

Slide 25

• Fashions - currently popular products that tend to follow recurring life cycleseg. Wide lapels, 3 button suits, high heels vs. wedge heel

• “the currently acceptable style” p. 265


Product Life

Cycle

Slide 26

• Fads - Fashions with abbreviated life cycles - only popular with certain groups

• - music

• - fast food

• - children’s toys

• - “adult toys”

5


Product Life

Cycle

Slide 27

Eg. Watches w red LCD

Page 188


Product Life

Cycle

Slide 28

Product Life Cycle Considerations in Marketing Strategy

• Understand that profits have a predictable pattern

• in the early stages, focus is on product information

• in the later stages, focus is on brand promotion

• use market segmentation in maturity stage to maintain strong core customer basis

Page 188


Product Life

Cycle

Slide 29



The time at each stage varies greatly

Mini-discElectric cars

*= virtual reality

Digital cameras

Monopoly Monopolistic Oligopoly Pure Competition

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