MARKETING MIX 1. PRODUCT PRODUCT LIFE CYCLE

Product Life Cycle (PLC) The stages a product goes through during its life including introduction, growth, maturity, and decline maturity growth decline intro

STAGE ONE (1) intro INTRODUCTION – a NEW product is introduced into the market Basic Goals: Create awareness for the new product Gain initial acceptance Develop a few good channels of distribution Strong promotion is needed to inform potential buyers of the product's availability. Profits in the introductory stage are non-existent because sales volume is low and promotional expenses are high

STAGE TWO (2) GROWTH – if a product has been launched growth successfully, sales will begin to increase rapidly. New customers are beginning to purchase the product and initial customers are making repeat purchases Competitors are attracted into the market with similar offerings who add features and options so their product is better than the first (Honda / Hyundai) Products become more profitable Distribution channels may be widened (more places offering product for purchase)

STAGE THREE (3) maturity MATURITY – product survived the earlier stages. Tends to spend the longest in this phase (typically the maturity stage has the greatest number of competitors which can cause price wars) (Cable) There is very little growth in new customers; therefore, competitors are working to steal market share from each other (prices begin to decline) Many discounts/promotional pricing strategies are used during this phase. Features/Benefits adopted by all companies Most money is spent on Promotion during this stage

STAGE FOUR (4) DECLINE – final stage where sales and profits fall off rapidly and competitors become more cost focused Customer tastes may have changed or more innovative products are introduced Products are often dropped from a company’s product line during this phase Prices are reduced to continue to sell product

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) Product is being discontinued, so price greatly reduced Decline Stage (Thumbs - UP)

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) Lucky Brand is going to begin making running shoes Growth Stage (Thumbs DOWN - Introductory Stage)

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) There are now a few competitors who are selling the product but have added features to their product to make it different than the original Growth Stage (Thumbs - UP)

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) Lucky Brand is going to start making running shoes Growth Stage (Thumbs DOWN – Introductory Stage)

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) Not much profit made from product. Most of the product’s profit goes toward promoting it Introductory Stage (Thumbs - UP)

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) Most of the product’s profit goes toward promoting it Introductory Stage (Thumbs DOWN - Maturity Stage)

Check for Understanding With your eyes closed, indicate agree (thumbs up) or disagree (thumbs down) Product spends the most time in this stage and has the most competitors Maturity Stage (Thumbs – UP)