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Product life cycle & marketing strategy
Product life cycles have distinct stages - introduction, growth, maturity, and decline. Each stage requires different marketing strategies to address changing demand and competition. During introduction, demand is low and profits are negative as costs are high. Marketing focuses on creating awareness through promotions. In growth, demand and profits rise as acceptance increases and prices stabilize. Mature products have slowing growth, so marketing emphasizes price reductions and feature changes. In decline, sales fall as new products satisfy customer needs, so marketing focuses on reducing expenses to extract remaining value. The document discusses how product life cycles, demand, and optimal marketing strategies vary depending on the product, technology changes, and rate of customer adoption through innovators, early adopters,
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Introduction of the Product Life Cycle (PLC) and its impact on marketing strategies.
Defining products as valuable offerings including goods and services that may not imply ownership.
Comparison of product demand in 2013 vs 1990, highlighting items like cell phones and insulin.
Analysis of how new products, technology, substitutes, and consumer needs impact demand changes.
Overview of PLC principles: limited life, distinct sales stages, varying profits and strategies.
Detailed stages of the PLC including product development, growth, maturity, and decline with examples.
How the PLC duration varies among products and is influenced by marketing and technological innovations.
Stages of consumer adoption from innovators to laggards and their impact on product sales.
Graphic representation of sales trends over time, including styles, fashion, and fads.
Tailored marketing objectives, product strategies, pricing, advertising, and distribution for PLC stages.
Emphasis on the importance of strong products as the core of great branding.
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Product life cycle & marketing strategy
- 1. Product Life Cycle& Marketing Strategy Hitesh Gupta 26th Sep ‘13
- 2. •Product is anythingwhich is of value & is offered thro’ voluntary exchange •A change in feature creates a new product •Service : Set of activities, benefits or satisfaction offered for sale » Intangible » May not result in ownership What is a product?
- 3. Goods and/or ServicesAre the Product
- 4. What is thedemand for these products in 2013 compared to 1990? » Fixed phone, land-line » Cell phones » Umbrella » Video cassette player » Diabetes Insulin injections Demand for products ???
- 5. •New products meetneeds better » Maruti 800 v/s Premier Padmini • Technology changes » Video conference v/s air travel • Substitutes replace a product » Telegrams v/s SMS, SMS v/s Mobile Chat • Population moves to the next level in Maslow’s NH » Basic variant of a car to full loaded model Why would demand change?
- 6. PLC Concept isBased on Four Premises Products have a limited life. Product sales pass through distinct stages, each with different marketing implications. Profits from a product vary at different stages in the life cycle. Products require different strategies at different life cycle stages.
- 7. Product Life-Cycle Strategies •Product development • Introduction • Growth • Maturity • Decline • Begins when the company develops a new-product idea • Sales are zero • Investment costs are high • Profits are negative PLC Stages
- 8. Product Life-Cycle Strategies •Product development • Introduction • Growth • Maturity • Decline • Slow sales growth – cell phones 15 yrs back, Hybrid cars today, Blu-Ray technology, HD TV • Intensive promotions, communications • Price uncertainty • Uncertain competition reactions • Uncertain consumer responses • Non-existent profits • Negative cash flow PLC Stages
- 9. Product Life-Cycle Strategies •Product development • Introduction • Growth • Maturity • Decline • Rapid sales growth – cell phones today, internet, LCD TV • Market acceptance • Price stabilization • Features stabilization • Profits start coming in • Brand building starts • Competition starts building PLC Stages
- 10. Product Life-Cycle Strategies •Product development • Introduction • Growth • Maturity • Decline • Slow sales growth – Land lines, 100cc motorbikes, fountain pens • Price reductions, promotions • Features changes / reductions / new • Profits go down • Competitors introduce new products • Brand sustainability is imperative in communication PLC Stages
- 11. Product Life-Cycle Strategies •Product development • Introduction • Growth • Maturity • Decline • Decline in sales – audio & video cassette players, pagers • New products meet satisfaction • Profits erode • Communication expenses are stopped PLC Stages
- 12. Varies with everyproduct » Can be controlled by marketing efforts • Changes with technology introductions » Inventions » Disruptive innovations PLC Duration
- 13. • Innovators – »“first on the block” buyers » Typically younger in age » They enjoy taking risks with new products » They are mostly well informed » Very small in numbers » Tolerate failures » They trigger the next level - Adopters • Early adopters – » These wait for initial purchases to happen, product reviews » They enjoy novelty, higher incomes youth, educated, socially forward » Opinion leaders » They help spread the world PLC and the Customer adoption process
- 14. •Majority - » Skepticism,senior in age, mixed levels of education » They build the sales volumes » Don’t like to take too much risk » Competitors enter the market when these come in » Careful buyers & choosers •Laggards - » They avoid change » Rely on existing products until it outgrows completely » Form the last small section » They don’t need to much ad & communication
- 16. PLC Length andShape Sales Sales Sales TimeTime Time Style Fashion Fad
- 17. Introduction Growth MaturityDecline Marketing objectives Create product awareness & trials Gain market share, create strong positions Defend market share, create profits Reduce expenses milk brands Product strategy Offer basic Products Eg. Vodafone Offer product extensions, build service differentiation Diversify brands, items & models Eg. Blackberry Phase out weak products Price Charge cost Plus Penetration price promotions, deals Eg Dominos in India Match pricing to strong competitors Cut prices Advertising & Communications Chosen market segments are addressed Segment awareness Advertise differentiation Reduce levels to retain loyalists Place Build Selective Distribution Eg. Hushpuppies Build intensive distribution Build more intensive distribution Go Selective: Phase out unprofitable outlets Marketing Strategies in the PLC
- 18. At the heartof a great brand is a great product Thank you