50798692-Product-life-cycle-Marketing-Strategies-ppt

Product life cycle & Marketing Strategies:

Product life cycle & Marketing Strategies

Why a product life cycle?:

Why a product life cycle? A company’s positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle (PLC) When we say that a product has a life cycle we assert four things: Products have a limited life. Products sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. Profits rise and fall at different stages of the product life cycle. Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life – cycle stages.

Product Life Cycle:

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 Life Cycle:

Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Sales and Profits Sales and Profits Over the Product’s Lifetime Product Life Cycle

Introduction Stage of the PLC:

Sales Costs Profits Marketing Objectives Product Price Low High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus formula Distribution Build selective distribution Promotion Heavy to entice product trial Summary of Characteristics, Objectives, & Strategies Introduction Stage of the PLC

Growth Stage of the PLC:

Sales Costs Profits Marketing Objectives Product Price Rapidly rising Average cost per customer Rising Maximize market share Offer extension, service, warranty Penetration strategy Distribution Build intensive distribution Promotion Reduce to take advantage of demand Summary of Characteristics, Objectives, & Strategies Growth Stage of the PLC

Maturity Stage of the PLC:

Sales Costs Profits Marketing Objectives Product Price Peak Low cost per customer High Maximize profits while defending market share Diversify brand and models Match or best competitors Distribution Build more intensive distribution Promotion Increase to encourage brand switching Summary of Characteristics, Objectives, & Strategies Maturity Stage of the PLC

Decline Stage of the PLC:

Sales Costs Profits Marketing Objectives Product Price Declining Low cost per customer Declining Reduce expenditures and milk the brand Phase out weak items Cut price Distribution Selective: phase out unprofitable outlets Promotion Reduce to minimum level Summary of Characteristics, Objectives, & Strategies Decline Stage of the PLC

Three special categories of PLC:

Three special categories of PLC

Continued…:

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.

Four Introductory Marketing Strategies:

Four Introductory Marketing Strategies Rapid- skimming strategy Rapid- penetration strategy Slow- penetration strategy Slow- skimming strategy Price Low High Promotion High Low

Marketing strategies for Growth stage:

Marketing strategies for Growth stage During the growth stage, the firm uses several strategies to sustain rapid market growth. Improves product quality and adds new features and improved styling. Adds new models and flanker products(i.e., products of different sizes, flavors, and so forth that protect the main product). It enters new market segments It increases its distribution coverage and enters new distribution channels. It shifts from product- awareness advertising to product- preference advertising. It lowers price to attract the next layer of price – sensitive buyers.

Marketing strategies for Maturity stage:

Marketing strategies for Maturity stage Three potentially useful ways to change the course for a brand are market, product, and marketing program modification. Market Modification Sales volume = no. of brand users * usage rate per user. Expand the no. of brand users Convert nonusers Enter new market segments Attract competitors’ customers

Continued..:

Continued.. Increase the usage rate among users Have consumers use the product on more occasions. Have consumers use more of the product on each occasion Have consumers use the product in new ways. Product modification Trying to stimulate sales by modifying the product’s characteristics through

Continued..:

Continued.. Quality improvement : Aims at increasing the product’s functional performance. Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh Feature improvement Aims at adding new features, such as size, weight, materials, additives, and accessories, that expand the product’s performance, versatility, safety, or convenience. Style improvement Aims at increasing the product’s esthetics appeal. Eg; New car models, New Coke

Decline Stage:

Decline Stage Increase investment Resolve uncertainties - stable investment Selective niches Harvesting Divesting To establish a system for identifying weak products. Some firms’ abandon declining markets earlier than others.

Thank You:

Thank You