Product Life Cycle

Product Life Cycle Introduction Product is introduced to the marketplace. Heavy on start-up costs Growth Demand increases Sales grow Competitors may enter the market Most profitable stage. Maturity Sales begin to decline as competitors take market share Focus on reducing costs Tinker w/ product. Decline Product is withdrawn from the market Costs savings taken Search for alternative markets or new products Not in Chapter, but present it anyway.

Product Life Cycle Maturity Sales begin to decline as competitors take market share Focus on reducing costs Tinker w/ product. Decline Product is withdrawn from the market Costs savings taken Search for alternative markets or new products Not in Chapter, but present it anyway.

How Organizations Respond to Uncertainty Defenders experts at producing and selling narrowly defined products “Let’s stick with what we do best, avoid other involvements or distractions…” Prospectors focus on developing new products and in seeking out new markets, rather than waiting for things to happen “Let’s create our own opportunities, not wait for them to happen” Defenders “Let’s stick with what we do best, avoid other involvements experts at producing and selling narrowly defined products Prospectors “Let’s create our own opportunities, not wait for them to happen” focus on developing new products and in seeking out new markets, rather than waiting for things to happen

How Organizations Respond to Uncertainty Analyzers let other organizations take the risks of product development and marketing “Then we will replicate what seems to work best” Reactors make adjustments only when finally forced to by environmental pressures “Let’s wait until there’s a crisis, then we’ll react” Analyzers – “Let others take the risks of innovating, & we’ll imitate what works best” Reactors – “Let’s wait until there’s a crisis, then we’ll react”

Question? XYZ Company scans it environment regularly. However, it does not tend to seek opportunities outside its present markets. This company would most likely be a (n): Reactor Prospector Analyzer Defender The correct answer is “D” - defender Page: 152 LO: 1 Difficulty: Moderate AACSB: 6 BT: Application

Let’s Practice Planning You and your team of 2/3 have been asked to review a product for your company. The product is in or entering the decline stage of the product life cycle….. Your job! FIX IT! You will set up your project team Collectively write a report (PPT) answering the questions

MARKETING ACTIVITY TIME! You and your team have been asked to review a product for your company. In what stage of the product life cycle is your product? Maturity or Decline What type of competition can you expect for the product? Name at least 4 direct & 4 indirect competitors Will profits likely increase, decrease or stay the same? Products Oranges for Tropicana (Pepsi) Shoelaces for Stride Rite (Collective Brands) Stationary for Hallmark Cards Landline Phones for Uniden Sofas for La-Z-Boy Jeans for Gap, Inc. Chicken sandwich for Chic-fil-a Frisbees for Toys-R-Us Procedure Go over this slide and assign students to a product. Give out Project Instructions and Rubric. Allow students to work for one day Show Design PowerPoint Allow students to refine presentation using good principles of design

MARKETING ACTIVITY TIME! You and your team have been asked to review a product for your company. What type of changes would you recommend should the company want to tinker with the product? Develop 2 solid alternatives to reboot Packaging or usefulness? Can the product be altered? Significantly? Which reaction to change is driving your decision? Reaction, Prospector, Analyzer, or Defender What will be your target market for the rebooted part? New audience Same users but with new product or version Products Oranges for Tropicana (Pepsi) Shoelaces for Stride Rite (Collective Brands) Stationary for Hallmark Cards Landline Phones for Uniden Sofas for La-Z-Boy Jeans for Gap, Inc. Chicken sandwich for Chic-fil-a Frisbees for Toys-R-Us Procedure Go over this slide and assign students to a product. Give out Project Instructions and Rubric. Allow students to work for one day Show Design PowerPoint Allow students to refine presentation using good principles of design