Product life cycle ppt @ bec doms mba 2010

1. Product Life Cycle
21-1

2. A product is introduced among consumers, and if consumers perceive it as
meeting their needs and want, it experiences a period of growth.
Subsequently, it reaches the stage of maturity and when it loses its appeal,
its decline starts and eventually is may be taken off the market (demise). The
classical product life cycle curves are depicted as “S” shaped and generally
divided in four stages: Introduction, growth, maturity, and decline.

3. Common Product
Life Curves
Sales Sales Sales
Time Time Time
(a) Growth-Decline Plateau (b) Cycle-Recycle Pattern (c) Innovative Maturity or
Scalloped Pattern

4. Common Product
Life Curves
Sales
Profits
Loss
Introduction Growth Maturity Decline
Time
(d) Classical Life Cycle Pattern

5. Pioneer Follower
 First choice of market  Can bring in superior
segments. technology.
Pioneer and
Follower  Influence on consumer  Can take advantage of
Advantages attitudes and choice criteria. pioneer’s product mistakes.
 Pioneer defines the rules of the  Ability to take advantage of
game. pioneer’s positioning mistakes.
 Switching costs higher for early  Ability to take advantage of
adopters of pioneer’s product. pioneer’s marketing mistakes.
 Gaining distribution advantage.  Can take advantage of
pioneer’s resources limitations.
 Economies of scale and more
experience.
 Possibility of pre-empting
scarce
resources and suppliers.

6. Introduction Stage
The introductory stage is viewed as fairly risky and quite expensive because
large amounts of money is spent on advertising and other tools of marketing
communications to create consumer awareness in sufficiently large numbers,
and encourage trial.

7. Growth Stage
The growth stage of life cycle is characterised by a sharp rise in sales. Only a
small percentage of new products introduced survive to reach the growth
stage.

8. Maturity Stage
Most products after surviving competitive battles, winning customer
confidence and successful through growth phase enter their maturity stage.
The sales plateau, and this flattening of sales usually lasts for some time
because most products in the category have reached their maturity stage, and
there is stability in terms of demand, technology, and competition.

9. Introduction Growth Maturity Decline
Characteristics
Market Growth Rate Moderate High Insignificant Negative
(Rs)
Technical Change High Moderate Limited Limited
Product Life
In Product Design
Cycle Stages,
Characteristic Market Segments Few Few to many Few to many Few
s and Competitors Few Many Limited Few
Standard Profitability Negative High High for Market- Low
Responses share leaders
Company’s Standard Stimulate primary Gain market Gain market share Harvest
Responses demand share
Product Improve quality Continue quality Concentrate on No change
improvements features
Product Line Narrow Broad Hold line length Reduce line
length
Price Skimming or Reduce Hold or reduce Reduce
Penetration
Promotion High High Hold or reduce Reduce
Distribution Selective Intensive Intensive Selective

10. Decline Stage
Decline stage sets in when customer preferences change due to the availability
of technologically superior products and consumers’ shift in values, beliefs, and
tastes to products offering more value.

11. Implications and Limitations of Product Life
Cycle Concept
Product life cycle concept shows a framework to spot the occurrence of
opportunities and threats in a product market and the industry. This can help
firms to reassess their objectives, strategies, and different elements of
marketing programme.