1. 5.5- Product Life Cycle

2. Product Life Cycle What is the product life cycle:
What is it?
A tool for mapping out the four stages of a product’s commercial life:
Introduction; Growth; Maturity; Decline.
All products have a life cycle. What does this mean?
What is the product life cycle:
All products have a life cycle. What does this mean? All introduced to market, but eventually they will leave the market.

3. Introduction– This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector.
Example)
Growth– The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage.
Example) Tablet computers
Maturity– During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage.
Decline– Eventually, the market for a product will start to shrink, and this is what’s known as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product. While this decline may be inevitable, it may still be possible for companies to make some profit by switching to less-expensive production methods and cheaper markets.
Example) Desktop personal computers- 10% decline throughout 2013

4. Introduction
Could be the most expensive part for a company launching a new product.
The size of the market for the product is small
Sales are low
although they will increase (hopefully)
High Costs
especially if it’s a competitive sector
research and development
consumer testing
marketing needed to launch the product can be very high
Examples? Holographic projections

5. Growth Strong growth in sales and profit
start to benefit from economies of scale in production
the profit margins, as well as the overall amount of profit, will increase.
Allows for more investment in the promotional activity of product.
Increasing demand sees little need to modify pricing.
Examples? Tablet computers

6. Maturity Product is established
Aim for the manufacturer is to maintain the market share they built
Competition appears and the pace of sales growth may slow
Manufacturers try to differentiate their product
Examples?

7. Decline Market for a product will start to shrink
Market becomes saturated
all the customers who will buy the product have already purchased it
or because the consumers are switching to a different type of product.
While this decline may be inevitable, it may still be possible for companies to make some profit
switch to less-expensive production methods
cheaper markets.
Example) Desktop personal computers- 10% decline throughout 2013

8. Trends of Product Life Cycle
Brief maturity then decline rapidly –Fashion and toys
Other products have very long periods of maturity- Coca-Cola

9. Rebirth and Growth Stage: While the fifth stage is rare, it does occur on products from time to time. For those companies that decide to continue producing product, there is a wealth of gross profit to take advantage of. In this stage, all the competitors have left – believing the product line to be dead for good. However, there are still customers and with fewer manufacturers, those that still provide the product, are able to substantially grow gross profit.

10. Extending the Product Life Cycle
What can businesses do to extend the product life cycle?
Advertising – try to gain a new audience or remind the current audience
Price reduction – more attractive to customers
Adding value – add new features to the current product, e.g. improving the specifications on a smartphone
Explore new markets – selling the product into new geographical areas or creating a version targeted at different segments
New packaging – brightening up old packaging or subtle changes

11. Built in Obsolescence What do you think it is?
Why would manufacturers do this?
Planned obsolescence may include:
Low durability
Style obsolescence
Not easily or cheaply repaired
Difficult to disassemble restricting maintenance
Improved models
Built in obsolescence?- deliberate tactic employed by manufacturers to create products with a limited lifespan
Why?- designed to force consumers to purchase a product repeatedly

12. Advantages Disadvantages
What are the advantages and disadvantages of built in obsolescence? Could be for manufacturers or consumer. Right side of room lists the advantages and the left side lists the disadvantages.

14. Circular Economy What is it?
Industrial economy that is set up in a way to have zero sum impact on the environment
Waste should be designed out at the earliest stages of planning. Designing for disassembly, re-purposing and recycling
Use energy from renewable resources

15. Read:
burns-110-years php
Is built in obsolescence real or a myth?
Are there economical benefits to built in obsolescence?
Ethical/moral issues?