Product Life Cycle Stages and Marketing Implications:
A new product progresses through a sequence of stages from introduction to growth, maturity,and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.
* Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
b) Growth Stage:
In the growth stage, the firm seeks to build brand preference and increase market share.
* product: quality is maintained and additional features and support services may be added.
* Pricing: is maintained as the firm enjoys increasing demand with little competition.
* Distribution: channels are added as demand increase and customers accept the product.
* Promotion: is aimed at a broader audience.
c) Maturity Stage:
At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
* product: features may be enhanced to differentiate the product from that of competitors.
* Pricing: may be lower because of the new competition.
* Distribution: becomes more intensive and incentives may be offered to encourage preference over competing products.
* Promotion: emphasizes product differentiation.
d) Decline Stage:
In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At sales decline, great care has to be taken to manage the product carefully.
As sales decline, the firm has several options:
* Maintain the product- possibly rejuvenating it by adding new features and finding new uses.
* Harvest the product-reduce costs and continue to offer it, possibly to a loyal niche segment.
* Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.
A new product progresses through a sequence of stages from introduction to growth, maturity,and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.
The product life cycle goes through many phases and involves many professional disciplines and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures.
Stages of Product Life Cycle:
The different stages in a product life cycle are:
a) Market Introduction
b) Growth stage
c) Mature stage
d) Decline or Stability stage
a) Market Introduction stage:
In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:
* Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained.
* Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.
*Distribution is selective until consumers show acceptance of the product.
*Distribution is selective until consumers show acceptance of the product.
* Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
b) Growth Stage:
In the growth stage, the firm seeks to build brand preference and increase market share.
* product: quality is maintained and additional features and support services may be added.
* Pricing: is maintained as the firm enjoys increasing demand with little competition.
* Distribution: channels are added as demand increase and customers accept the product.
* Promotion: is aimed at a broader audience.
c) Maturity Stage:
At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
* product: features may be enhanced to differentiate the product from that of competitors.
* Pricing: may be lower because of the new competition.
* Distribution: becomes more intensive and incentives may be offered to encourage preference over competing products.
* Promotion: emphasizes product differentiation.
d) Decline Stage:
In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At sales decline, great care has to be taken to manage the product carefully.
As sales decline, the firm has several options:
* Maintain the product- possibly rejuvenating it by adding new features and finding new uses.
* Harvest the product-reduce costs and continue to offer it, possibly to a loyal niche segment.
* Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.
No comments:
Post a Comment