Unit III - Services Marketing - Mr.K.Mohan Kumar Unit – III Marketing strategies in the different stages of Service Life Cycle 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar

Unit III - Services Marketing - Mr.K.Mohan Kumar Service Life Cycle The Service life cycle (PLC), like the biological life cycle, describes the advancement of services through identifiable stages of their existence as shown below: Exhibit 10-3 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar

SLC Stages and Characteristics The interaction of the diffusion process and firm competition means that marketers face a different situation at each stage of the service life cycle. Exhibit 10-5 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar

SLC Marketing Strategies Shortening lengths of product life cycles and their different shapes increase the complexity of marketing decisions. Firms respond to these trends by developing marketing strategies to take advantage of each life cycle stage. 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar

Services Life-Cycle Strategies The Services Life Cycle (PLC) has Five Stages Services Development, Introduction, Growth, Maturity, Decline Not all Servicess follow this cycle: Fads Styles Fashions 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 3: Know the stages of the Services life cycle process

Services Life-Cycle Strategies The Services life cycle concept can be applied to a: Services class (soft drinks) Services form (diet colas) Brand (Diet Dr. Pepper) Using the PLC to forecast brand performance or to develop marketing strategies is problematic 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 3: Know the stages of the Services life cycle process

Services Life-Cycle Strategies PLC Stages Begins when the company develops a new-Services idea Sales are zero Investment costs are high Profits are negative Services development Introduction Growth Maturity Decline 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Services Life-Cycle Strategies PLC Stages Low sales High cost per customer acquired Negative profits Innovators are targeted Little competition Services development Introduction Growth Maturity Decline 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Marketing Strategies: Introduction Stage Services – Offer a basic Services Price – Use cost-plus basis to set Distribution – Build selective distribution Advertising – Build awareness among early adopters and dealers/resellers Sales Promotion – Heavy expenditures to create trial 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Services Life-Cycle Strategies PLC Stages Rapidly rising sales Average cost per customer Rising profits Early adopters are targeted Growing competition Services development Introduction Growth Maturity Decline 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Marketing Strategies: Growth Stage Services – Offer Services extensions, service, warranty Price – Penetration pricing Distribution – Build intensive distribution Advertising – Build awareness and interest in the mass market Sales Promotion – Reduce expenditures to take advantage of consumer demand 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Unit III - Services Marketing - Mr.K.Mohan Kumar Activity Video Presentation: “ Mobile Phone Life Cycle” https://www.youtube.com/watch?v=r-8dS6mA8vc 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar

Services Life-Cycle Strategies PLC Stages Sales peak Low cost per customer High profits Middle majority are targeted Competition begins to decline Services development Introduction Growth Maturity Decline 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Marketing Strategies: Maturity Stage Services – Diversify brand and models Price – Set to match or beat competition Distribution – Build more intensive distribution Advertising – Stress brand differences and benefits Sales Promotion – Increase to encourage brand switching 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Services Life-Cycle Strategies PLC Stages Declining sales Low cost per customer Declining profits Laggards are targeted Declining competition Services development Introduction Growth Maturity Decline 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle

Marketing Strategies: Decline Stage Services – Phase out weak items Price – Cut price Distribution – Use selective distribution: phase out unprofitable outlets Advertising – Reduce to level needed to retain hard-core loyalists Sales Promotion – Reduce to minimal level 5/27/2018 Unit III - Services Marketing - Mr.K.Mohan Kumar Goal 4: Realize how marketing strategies change during the Services life cycle