Product Life Cycle Decision Point

Traditional Product Life Cycle

Traditional PLC Introduction When a new product is launched into the marketplace…the birth of a new product Very expensive (warehouse space, new packaging, labeling, production equipment, market research costs etc.) Marketing efforts are focused on selling to the early adopters (first consumers) Will use either a PUSH strategy (efforts are focused on product placement in stores) or PULL strategy (use advertising to forge a +ve association with the product in the consumers mind)

Growth Word of mouth advertising is crucial at this stage, product must be visible Companies will advertise heavily at this stage The product will either catch on or fail

Maturity Sales of a product increase much slower Marketers keep the name of their brand visible Invest little $ in new advertising, while original promotional mix is less frequent More chance for profitability because costs are low

Decline Happens when a company is unable to find new customers for their product(s) Marketers will try various tactics to get out of this stage (re-design/re-package/re-price)

Decision Point Stage Marketers make important brand management decisions regarding the products future Usually involves new promo and new pricing (example: Cow Brand baking soda made a market shift to focus on a product that removes odors from freezers, litter boxes etc.)

Nontraditional PLC’s FAD A product, service or idea that is extremely popular for a very brief period of time Becomes unpopular just as quickly, vanishing soon after it’s introduction to the marketplace When fads die, businesses run the risk of being caught with large amounts of unwanted inventory FAD

NICHE A small section of the market that a product dominates Because the market is so small, there is little competition Example: the Pet Hotel in Peterborough, Ontario is a niche market because there are not enough consumers to make the market attractive to competitors, however the market is large enough to be profitable. NICHE

Seasonal The impact that seasonal changes will have on the life of a product will depend on the product (I.e. Ice ceam parlours) Marketers of seasonal products and services anticipate periods of high and low demand These companies will work extra hard to create demand outside the peak season.