Linking promotional activity to the product life cycle

LEARNING OUTCOMES FOR THIS LESSON Explain how and why companies extend their product range. Show how promotional activity links to stages in the product life cycle. Explain how BIC has sought to add value to its products.

INTRODUCTION BIC is a market leader in a number of products. It was founded in 1950 with the launch of the first ballpoint pen that was priced at a level that people could afford. It quickly became the market leader. In 1975 it launched the first one-piece shaver. This also became a market leader within disposables.

PRODUCT LIFE CYCLE The product life cycle shows the stages a product passes through from launch to decline. At each stage the product needs to be treated differently. A business needs to bring out new products to meet the changing needs of its customers.

PRODUCTS FOR CONSUMERS AT AFFORDABLE PRICES BIC was founded with the introduction of the first high quality ballpoint pen at an affordable price. BIC has looked to add value to its products and to develop a range of new products. BIC's introduction of the Classic one-piece shaver, rebranded as BIC 1, illustrates this process. The re-branding was intended to enhance the brand's simplicity whilst still maintaining the highly recognisable, orange packaging.

BOSTON MATRIX Problem children are newly launched products. Dogs are in decline. They need dropping Stars are in the growth stage. Cash cows have high market share.

PROMOTION AND LIFE CYCLE Different levels of promotion are needed at each stage of the life cycle. When products are launched, promotion is used to increase awareness. People are encouraged to trial the new product. During the growth stage, promotion is used to support new users. At the mature stage, promotions can be used to inject new life. For instance new variations to a product may be brought out. In decline, the product can be withdrawn and replaced.

CONCLUSION Successful businesses know how the product life cycle works as well as the Boston box. BIC can use these tools to make sure that it continues to succeed.

ASSESSMENT OF LEARNING OUTCOMES How well can you explain how and why companies extend their product range? How well can you show how promotional activity links to stages in the product life cycle? How well can you explain how BIC has sought to add value to its products?