The Product Life Cycle

Product Life Cycle Four Stages a Product Goes Through in Life: Introduction Growth Maturity Decline Maturity Growth Decline Introduction

INTRODUCTION Stage Company’s Efforts Focus On: Promotion (Letting People Know) Production (Efficiencies, Bugs) Make First Run Pieces Establish Manufacturing Procedures GOAL: Draw Attention to New Product the first time customers become aware

INTRODUCTION Stage Impact on Marketing Mix (4 P’s): PRODUCT – Branding and Quality are Established. Patents and Trademarks are Obtained. PRICING – May be Low (penetration pricing) or High (recover developmental costs)

INTRODUCTION Stage Impact on Marketing Mix (4 P’s) (cont.) : PLACE – Company is Selective Until Customers Show Acceptance of Product PROMOTION – Costs at their Highest. Focus on New Product Benefits. Build Product Awareness.

GROWTH Stage Sales and Profit are Increasing Much of Target Market Knows of and Buys the Product Competition is Aware and Offers New Product

GROWTH Stage Impact on Marketing Mix (4 P’s): PRODUCT – Quality Maintained. Additional Features and Services Added. New Models May be Introduced. PRICING – Maintained. Company is Enjoying Increased Demand with Relatively Little Competition.

GROWTH Stage Impact on Marketing Mix (4 P’s) (cont.) : PLACE – Channels (outlets) Added as Demand Increases. PROMOTION – Aimed at Broader Audience. FOCUS Now on Consumer Satisfaction

MATURITY Stage Sales Level Off or Slow Down Much More Competition Much of Target Market Already Owns the Product.

MATURITY Stage Impact on Marketing Mix (4 P’s): PRODUCT – Features Enhanced. Differentiate From Competition. PRICING – May Be Lowered a Little.

MATURITY Stage Impact on Marketing Mix (4 P’s) (cont.) : PLACE – Becomes More Intensive. Incentives May Be Offered to Encourage Sales of Competition. PROMOTION – Expenses May Climb. Focus On Differentiating Product From Competition.

DECLINE Stage Sales Fall. Profits May Be Smaller Than Costs. Company Must Make Choices Sell or License the Product (delete) Recommit to the Product Line Discount the Product Regionalize the Product Modernize or Alter the Product

DECLINE Stage Sell or License the Product Recommit to the Product Line Ex. Power Rangers by Japanese. Recommit to the Product Line Find New Use for Product EX. Geltin Dessert Mixes to Finger Jell-O Discount the Product Permanent Repositioning to Discount Good. Example: Pepsodent Toothpaste.

DECLINE Stage Regionalize the Product Removing from Where Sales are Poor and Only Selling Where Strong Customer Loyalty. EX. Nabisco Foods Only Sells “My-T-Fine” Soup in Northeastern States. Modernize or Alter Product Offering Complete Redesign (Risk - Costs Money) EX. Lavoris Mouthwash was just Red, Green or Blue. Redesign to Clear…Whole New Young Market That Never Bought Original