Product-Life-Cycle

TimeProductDevelop-mentIntroductionProfitsSalesGrowthMaturityDeclineLosses/Investments($)SalesandProfits($)SalesandProfitsOvertheProduct’sLifeFromInceptiontoDemiseProductLifeCycleApplicationsoftheProductLifeCycle•ThePLCconceptcandescribea:–Productclasswhichhasthelongestlifecycles(i.e.gas-poweredcars),–ProductformwhichtendtohavethestandardPLCshape(i.e.minivans),–Brandwhichcanchangequicklybecauseofchangingcompetitiveattachesandresponses(i.e.FordTaurus),–Stylewhichisabasicanddistinctivemodeofexpression,–Fashionwhichisapopularstyleinagivenfield,–Fadwhichisafashionthatentersquickly,isadoptedquicklyanddeclinesfast.StyleModifyingtheProduct;Meetingthecompetition.Toyota’sRAV4ismorecompactandmoremodern-lookingthanmostotherSUV’s.WhatdootherSUV’s,considerednewproductsinthenineties,looklike?Clickorpressspacebartoreturn.ProblemsUsingthePLCTroubleidentifyingWhichStageofthePLCtheProductIsInDifficulttoForecasttheSalesLevel,theLengthofEachStage,andShapeofthePLCStrategyisBothaCauseandaResultoftheProduct’sLifeCycleThePLCConceptCanHelpinDevelopingGoodMarketingStrategiesforDifferentStagesoftheProductLife-Cycle,HoweverSomeProblemsCanArise:SalesCostsProfitsMarketingObjectivesProductPriceLowsalesHighcostpercustomerNegativeorlowCreateproductawarenessandtrialOfferabasicproductUsuallyishigh;usecost-plusformulaDistributionHighdistributionexpensesAdvertisingBuildproductawarenessamongearlyadoptersanddealersSummaryofCharacteristics,Objectives,&StrategiesIntroductionStageofthePLCEggBeatershadtofirstconvincepeoplethattheyneededaneggsubstitute(overcomingastrongnegativeresponseto“fakeeggs”)thendemonstratethattheirproductwasaperfectsolution.SalesCostsProfitsMarketingObjectivesProductPriceRapidlyrisingsalesAveragecostpercustomerRisingprofitsMaximizemarketshareOffernewproductfeatures,extensions,service,andwarrantyPricetopenetratemarketDistributionIncreasenumberofdistributionoutletsAdvertisingBuildawarenessandinterestinthemassmarketSummaryofCharacteristics,Objectives,&StrategiesGrowthStageofthePLCSalesCostsProfitsMarketingObjectivesProductPricePeaksalesLowcostpercustomerHighprofits,thenlowerprofitsMaximizeprofitswhiledefendingmarketshareDiversifybrandandmodelsPricetomatchorbestcompetitorsDistributionBuildmoreintensivedistributionAdvertisingStressbranddifferencesandbenefitsSummaryofCharacteristics,Objectives,&StrategiesMaturityStageofthePLCMaturityStageofthePLCCompanytriestoincreaseconsumptionofthecurrentproduct.Changingcharacteristicssuchasquality,features,orstylestoattractnewusers.Companytriestoimprovesalesbychangingoneormoremarketingmixelements.SalesCostsProfitsMarketingObjectivesProductPriceDecliningsalesLowcostpercustomerDecliningprofitsReduceexpenditureandmaintain,reposition,harvestordroptheproductPhaseoutweakitemsCutpriceDistributionGoselective:phaseoutunprofitableoutletsAdvertisingReducetolevelneededtoretainhard-coreloyalcustomersSummaryofCharacteristics,Objectives,&StrategiesDeclineStageofthePLCVolkswagonmadeacomebackwhenoneofitshallmarkproductswaswellpastthedeclinestage.NevertooLate.Whatothercompanieshavebroughtbackproductsfromthepast?Clickorpressspacebartoreturn.