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Instructor: Safaa S. Y. Dalloul
E-Marketing Unit 5 Product Life Cycle Instructor: Safaa S. Y. Dalloul
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Elements of Lecture Product Life Cycle PLC
Marketing Strategies: Introduction Stage and the Pioneer Advantage Marketing Strategies: Growth Stage Marketing Strategies: Maturity Stage Marketing Strategies: Decline Stage The Product Life-Cycle Concept: Critique E-Marketing Case Study: Asos.com online fashion company
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Product Life-Cycle Marketing Strategies
Product Life-Cycle Marketing Strategies
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What do you think the company will produce the product with unlimited time, stable income or losses…etc?
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Products Characteristics
Limited life. Product sales pass through distinct stages Profits rise and fall. Products require different strategies.
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Product Life Cycle
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Growth-Slump-Maturity Pattern
Sales grow rapidly when the product is first introduced and then fall to a "petrified" level that is sustained by late adopters buying the product for the first time and early adopters replacing the product. For Example products of small kitchen appliances such as handheld mixers and bread makers.
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Cycle-recycle Pattern
The pharmaceutical company aggressively promotes its new drug, and this produces the first cycle. Later, sales start declining and the company gives the drug another promotion push, which produces a second cycle (usually of smaller magnitude and duration).
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Scalloped Pattern Scalloped
Sales pass through a succession of life cycles based on the discovery of new-product characteristics, uses, or users. The sales of nylon, for example, show a scalloped pattern because of the many new uses parachutes, hosiery, shirts, carpeting, boat sails, automobile tires—that continue to be discovered over time.
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Style, Fashion, and Fad
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Product Life Cycle Product Development
Product development begins when the company finds and develops a new product idea. During product development, sales are zero, and the company’s investment cost mount
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Introduction Stage and the Pioneer Advantage
Introduction Stage and the Pioneer Advantage
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Product Life Cycle Why the sales in the introduction stage are slow?
Why the sales in the introduction stage are slow? Take time to roll out a new product Work out the technical problems Fill dealer pipelines Gain consumer acceptance
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Product Life Cycle Highest Promotional expenditures to:
Introduction Stage Highest Promotional expenditures to: Inform potential consumers. Induce product trial. Secure distribution in retail outlets.
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Product Life Cycle Pioneer Advantage To be first can be rewarding, but risky and expensive Most studies indicate that the market pioneer gains the most advantage.
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Product Life Cycle Introduction Stage Characteristics Sales Costs
Characteristics Sales Costs Profits Customers Competitors Low sales High cost per customer Negative Innovators Few
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Create product awareness
Product Life Cycle Introduction Stage Marketing Objectives Create product awareness and trial Marketing Objectives
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Product Life Cycle Introduction Stage Strategies Product
Strategies Product Offer a basic product Price Use cost-plus Distribution Build selective distribution Advertising Build product awareness among early adopters and dealers Sales Promotion Use heavy sales promotion to entice trail
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Growth Stage
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Product Life Cycle Growth Stage Characteristics Sales
Characteristics Sales Rapidly rising sales Costs Average cost per customer Profits Rising profits Customers Early Adopters Competitors Growing Number
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Product Life Cycle Growth Stage Marketing Objectives
Marketing Objectives Marketing Objectives Maximize market share
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Product Life Cycle Growth Stage Strategies Product
Strategies Product Offer product extensions, service, warranty Price Price to penetrate market Distribution Build intensive distribution Advertising Build awareness and interest in the mass market Sales Promotion Reduce to take advantage of heavy consumer demand
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Product Life Cycle Growth Stage What are the several strategies that the firm uses to sustain rapid market growth? Improves product quality and adds new product features and improved styling. Enters new market segments.
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Product Life Cycle Growth Stage What are the several strategies that the firm uses to sustain rapid market growth? Adds new models and flanker products (i.e., products of different sizes, flavors, and so forth that protect the main product). Increases its distribution coverage and enters new distribution channels.
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Product Life Cycle Growth Stage What are the several strategies that the firm uses to sustain rapid market growth? Shifts from product-awareness advertising to product- preference advertising. Lowers prices to attract the next layer of price-sensitive buyers. Company Logo
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Maturity Stage Company Logo
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Product Life Cycle 3 Phases Maturity Stage Sales flatten.
Stable 3 Phases Sales flatten. Most potential consumers have tried the product, and future sales are governed by population growth & replacement demand. Growth The sales growth rate starts to decline. No new distribution channels to fill. Decaying The level of sales starts to decline Customers begin switching to other products
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Product Life Cycle Maturity Stage
In maturity stage what happen when the sales slowdown in the industry? And how the competitors will act? Discuss
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Compare between quality, feature, and style improvement?
Product Life Cycle Maturity Stage Compare between quality, feature, and style improvement?
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Product Life Cycle Maturity Stage Characteristics Sales Peak sales
Characteristics Sales Peak sales Costs Low cost per customer Profits High profits Customers Middle majority Competitors Stable number beginning to decline
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Maximize profit while defending
Product Life Cycle Maturity Stage Marketing Objectives Marketing Objectives Maximize profit while defending market share
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Product Life Cycle Maturity Stage Strategies Product
Strategies Product Vary brand and models Price to match or best competitors Price Build more intensive distribution Distribution Advertising Stress brand differences and benefits Sales Promotion Increase to encourage brand switching
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Decline Stage
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Product Life Cycle Decline Stage Characteristics Sales Declining sales
Characteristics Sales Declining sales Costs Low cost per customer Profits Declining profits Customers Laggards Competitors Declining number
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Reduce expenditure and milk the brand
Product Life Cycle Decline Stage Marketing Objectives Marketing Objectives Reduce expenditure and milk the brand
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Product Life Cycle Decline Stage Strategies Product
Strategies Product Phase out weak items Price Cut price Distribution Go selective: phase out unprofitable outlets Advertising Reduce to level needed to retain hard-core loyal customers Sales Promotion Reduce to minimal level
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How the company can deal with the decline stage? And Why?
Product Life Cycle Decline Stage How the company can deal with the decline stage? And Why?
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Product Life Cycle Advantages Critique | Analysis
The PLC concept helps marketers interpret product and market dynamics. It can be used for planning and control, although it is useful as a forecasting tool. Advantages
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Note: Critics put those disadvantages of PLC theory
Product Life Cycle Critique | Analysis Product-life-cycle patterns are too variable in shape and duration. Marketers can seldom tell what stage the product is in a product may appear to be mature when actually it has reached a plateau prior to another upsurge. Disadvantages Note: Critics put those disadvantages of PLC theory
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Case Study
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Exercises List and define the steps in the new-product development process? Explain the categories of innovativeness?
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