The Product Life Cycle

Product Life Cycle….. No of sales Time line Research & Development (R&D) Launch / Introduction Growth Maturity Saturation Decline

Where would you place these products on the life cycle? Timeline Number of Sales

Product Life Cycle….. No of sales Time line Research & Development (R&D) Launch / Introduction Growth Maturity Saturation Decline

An enlightening video???? Explain why the standard 100 watt light bulb is being phased out by leading retailers Why are customers prepared to pay a higher price for energy-saving light bulbs? How does this link to the Product Life Cycle?

Typical products at different life stages. R & D Introduction Growth Maturity Decline For each product decide what life stage it belongs to!

R & D - Tesla Tesla – sponsored by Founder of Paypal – an electric sports car capable of 250 miles on 1 charge, 3 hour recharge, 0-60 in 4 sec & top speed 130mph & only £50,000 Initial design – R&D Launch model….

Roll up TV Screen A pioneering Teesside research facility aiming to make a paper-thin roll-up TV screen become a reality, has received backing from a major international player. The then make-believe subject of flexible roll-up computer and TV screens featured in the Tom Cruise film Minority Report in But thanks to Teesside expertise that fiction could soon become a reality.

Identify the implications of each life cycle stage…. R&DINTRODUCTIONGROWTHMATURITYDECLINE Sales none Low Cost per unit Very High Falling Very Low Competitors Very Few Lots Product Prototype remove weaker items Promotion focus raise media curiosity… target new segments Distribution NoneLimited Price not for sale!Skimming or penteration Penetration or push up price Competitive price Increase to exploit loyal customers? Or Discount

Identify the implications of each life cycle stage…. R&DINTRODUCTIONGROWTHMATURITYDECLINE Sales none Low speeding upAt highestFalling Cost per unit Very High Falling At lowesrLow Competitors Very Few few growingLotsFalling Product PrototypeOne basic model Product modification & improvements New models, diversified remove weaker items Promotion focus raise media curiosity… Build awareness target new segments Stress differences with competitors Lower budget to keep costs down Distribution NoneLimited Growing no of outlets High levels of distribution Reduce unprofitable channels Price not for sale!Skimming or penteration Penetration or push up price Competitive price Increase to exploit loyal customers? Or Discount ANSWERS

Extension Strategies These are ways to re-invigorate sales of a product after sales have hit maturity! New uses for product Enter new markets Develop product range Change packaging Encourage more frequent usage! Can you think of any recent products that have used any of these extension strategies?

Product Life Cycle….. No of sales Time line Research & Development (R&D) Launch / Introduction Growth Maturity Saturation Decline

The Product Mix Is where a company phases out old products and introduce new ones. The company tries not to have a ‘vacuum’ of sales – i.e. a gap When one product is declining another is growing while a third might just be about to be launched. What would this look like?

Why use the Product Life Cycle? Identify trends /possible revenue to be earned Identify ‘times’ in future where a company should INVEST in R&D Identify when extension strategies should be used Identify when to ‘end’ the life of a product.

Another video clip New technology…. In development The future of Keyboards: Swype!

Product Life Cycle….. No of sales Time line Research & Development (R&D) Launch / Introduction Growth Maturity Saturation Decline

A fad is a product that is extremely popular for a very short period of time. Knockoffs may quickly hit the market to capitalize on the fad. Some products have a very short growth stage that leads to a solid, but not financially spectacular, maturity stage. These products have a niche – a section of the market in which they dominate and into which very few competitors enter. Many products are popular only during a specific time or season. The product becomes popular again only when the season returns. Non-Traditional PLCs