Instructor: Safaa S. Y. Dalloul E-Marketing Unit 5 http:\\safaadalloul.wordpress.com Product Life Cycle Instructor: Safaa S. Y. Dalloul

Elements of Lecture Product Life Cycle PLC http:\\safaadalloul.wordpress.com Marketing Strategies: Introduction Stage and the Pioneer Advantage Marketing Strategies: Growth Stage Marketing Strategies: Maturity Stage Marketing Strategies: Decline Stage The Product Life-Cycle Concept: Critique E-Marketing Case Study: Asos.com online fashion company

Product Life-Cycle Marketing Strategies http:\\safaadalloul.wordpress.com Product Life-Cycle Marketing Strategies

http:\\safaadalloul.wordpress.com What do you think the company will produce the product with unlimited time, stable income or losses…etc?

Products Characteristics Limited life. Product sales pass through distinct stages Profits rise and fall. Products require different strategies. http:\\safaadalloul.wordpress.com

Product Life Cycle http:\\safaadalloul.wordpress.com

Growth-Slump-Maturity Pattern Sales grow rapidly when the product is first introduced and then fall to a "petrified" level that is sustained by late adopters buying the product for the first time and early adopters replacing the product. http:\\safaadalloul.wordpress.com For Example products of small kitchen appliances such as handheld mixers and bread makers.

Cycle-recycle Pattern http:\\safaadalloul.wordpress.com The pharmaceutical company aggressively promotes its new drug, and this produces the first cycle.   Later, sales start declining and the company gives the drug another promotion push, which produces a second cycle (usually of smaller magnitude and duration).

Scalloped Pattern Scalloped http:\\safaadalloul.wordpress.com Sales pass through a succession of life cycles based on the discovery of new-product characteristics, uses, or users.   The sales of nylon, for example, show a scalloped pattern because of the many new uses parachutes, hosiery, shirts, carpeting, boat sails, automobile tires—that continue to be discovered over time.

Style, Fashion, and Fad http:\\safaadalloul.wordpress.com

Product Life Cycle Product Development http:\\safaadalloul.wordpress.com Product development begins when the company finds and develops a new product idea. During product development, sales are zero, and the company’s investment cost mount

Introduction Stage and the Pioneer Advantage http:\\safaadalloul.wordpress.com Introduction Stage and the Pioneer Advantage

Product Life Cycle Why the sales in the introduction stage are slow? http:\\safaadalloul.wordpress.com Why the sales in the introduction stage are slow? Take time to roll out a new product Work out the technical problems Fill dealer pipelines Gain consumer acceptance

Product Life Cycle Highest Promotional expenditures to: Introduction Stage http:\\safaadalloul.wordpress.com Highest Promotional expenditures to: Inform potential consumers. Induce product trial. Secure distribution in retail outlets.

Product Life Cycle Pioneer Advantage http:\\safaadalloul.wordpress.com To be first can be rewarding, but risky and expensive Most studies indicate that the market pioneer gains the most advantage.

Product Life Cycle Introduction Stage Characteristics Sales Costs http:\\safaadalloul.wordpress.com Characteristics Sales Costs Profits Customers Competitors Low sales High cost per customer Negative Innovators Few

Create product awareness Product Life Cycle Introduction Stage http:\\safaadalloul.wordpress.com Marketing Objectives Create product awareness and trial Marketing Objectives

Product Life Cycle Introduction Stage Strategies Product http:\\safaadalloul.wordpress.com Strategies Product Offer a basic product Price Use cost-plus Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers Sales Promotion Use heavy sales promotion to entice trail

http:\\safaadalloul.wordpress.com Growth Stage

Product Life Cycle Growth Stage Characteristics Sales http:\\safaadalloul.wordpress.com Characteristics Sales Rapidly rising sales Costs Average cost per customer Profits Rising profits Customers Early Adopters Competitors Growing Number

Product Life Cycle Growth Stage Marketing Objectives http:\\safaadalloul.wordpress.com Marketing Objectives Marketing Objectives Maximize market share

Product Life Cycle Growth Stage Strategies Product http:\\safaadalloul.wordpress.com Strategies Product Offer product extensions, service, warranty Price Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market Sales Promotion Reduce to take advantage of heavy consumer demand

Product Life Cycle Growth Stage http:\\safaadalloul.wordpress.com What are the several strategies that the firm uses to sustain rapid market growth? Improves product quality and adds new product features and improved styling. Enters new market segments.

Product Life Cycle Growth Stage http:\\safaadalloul.wordpress.com What are the several strategies that the firm uses to sustain rapid market growth? Adds new models and flanker products (i.e., products of different sizes, flavors, and so forth that protect the main product). Increases its distribution coverage and enters new distribution channels.

Product Life Cycle Growth Stage http:\\safaadalloul.wordpress.com What are the several strategies that the firm uses to sustain rapid market growth? Shifts from product-awareness advertising to product- preference advertising. Lowers prices to attract the next layer of price-sensitive buyers. Company Logo

http:\\safaadalloul.wordpress.com Maturity Stage Company Logo

Product Life Cycle 3 Phases Maturity Stage Sales flatten. http:\\safaadalloul.wordpress.com Stable 3 Phases Sales flatten. Most potential consumers have tried the product, and future sales are governed by population growth & replacement demand. Growth The sales growth rate starts to decline. No new distribution channels to fill. Decaying The level of sales starts to decline Customers begin switching to other products

Product Life Cycle Maturity Stage http:\\safaadalloul.wordpress.com In maturity stage what happen when the sales slowdown in the industry? And how the competitors will act? Discuss

Compare between quality, feature, and style improvement? Product Life Cycle Maturity Stage http:\\safaadalloul.wordpress.com Compare between quality, feature, and style improvement?

Product Life Cycle Maturity Stage Characteristics Sales Peak sales http:\\safaadalloul.wordpress.com Characteristics Sales Peak sales Costs Low cost per customer Profits High profits Customers Middle majority Competitors Stable number beginning to decline

Maximize profit while defending Product Life Cycle Maturity Stage http:\\safaadalloul.wordpress.com Marketing Objectives Marketing Objectives Maximize profit while defending market share

Product Life Cycle Maturity Stage Strategies Product http:\\safaadalloul.wordpress.com Strategies Product Vary brand and models Price to match or best competitors Price Build more intensive distribution Distribution Advertising Stress brand differences and benefits Sales Promotion Increase to encourage brand switching

http:\\safaadalloul.wordpress.com Decline Stage

Product Life Cycle Decline Stage Characteristics Sales Declining sales http:\\safaadalloul.wordpress.com Characteristics Sales Declining sales Costs Low cost per customer Profits Declining profits Customers Laggards Competitors Declining number

Reduce expenditure and milk the brand Product Life Cycle Decline Stage http:\\safaadalloul.wordpress.com Marketing Objectives Marketing Objectives Reduce expenditure and milk the brand

Product Life Cycle Decline Stage Strategies Product http:\\safaadalloul.wordpress.com Strategies Product Phase out weak items Price Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers Sales Promotion Reduce to minimal level

How the company can deal with the decline stage? And Why? Product Life Cycle Decline Stage http:\\safaadalloul.wordpress.com How the company can deal with the decline stage? And Why?

Product Life Cycle Advantages Critique | Analysis http:\\safaadalloul.wordpress.com The PLC concept helps marketers interpret product and market dynamics. It can be used for planning and control, although it is useful as a forecasting tool. Advantages

Note: Critics put those disadvantages of PLC theory Product Life Cycle Critique | Analysis http:\\safaadalloul.wordpress.com Product-life-cycle patterns are too variable in shape and duration. Marketers can seldom tell what stage the product is in a product may appear to be mature when actually it has reached a plateau prior to another upsurge. Disadvantages Note: Critics put those disadvantages of PLC theory

http:\\safaadalloul.wordpress.com Case Study

Exercises http:\\safaadalloul.wordpress.com List and define the steps in the new-product development process? Explain the categories of innovativeness?

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