Product Life Cycle

Category: Entertainment

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Chapter 11Product Management Over the Product Life Cycle : 

Chapter 11Product Management Over the Product Life Cycle

What is the Product Life Cycle? : 

What is the Product Life Cycle? Describes the stages a product goes through in the marketplace including introduction, growth, maturity, and decline. PLC can apply to: Product category (watches) Product form (digital) Product brand (Timex)

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Slide 11-7

I. Introductory Stage : 

I. Introductory Stage A. Characteristics Low sales volume High costs No or little direct competition Basic product configuration B. Strategies Develop primary demand by building awareness and educating consumers Stimulate opinion leaders to buy the product Build channels of distribution (selective in the beginning) Two pricing strategies: price skimming – introduce at high price price penetration – introduce at low price

II. Growth Stage : 

II. Growth Stage A. Characteristics Sales volume increases significantly Costs per unit decrease Competition increases More product variation Strategies Engage in product modification Build selective demand; stress differentiation Move toward intensive distribution Practice more aggressive pricing

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Slide 11-10 Ford Hybrid Automobile andCanon Digital Rebel Camera What stage of the product life cycle?

III. Maturity Stage : 

III. Maturity Stage A. Characteristics Sales growth slows then levels off Profits decline for the industry Marginal competitors leave marketplace B. Strategies Rejuvenate product – change packaging, new models, line extensions Stimulate usage rate Maintain brand loyalty through reminder promotions Continue aggressive pricing Continue intensive distribution

IV. Decline Stage : 

IV. Decline Stage A. Characteristics Strong downward shift in sales Profits stay low and continue to decline Only a few strong competitors remain Back to basic product configurations B. Strategies Distribution reduced to fewer outlets Promotional support reduced Prices lowered Use harvesting strategy

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Product life cycles vary in length Product life cycles are getting shorter

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