1. 1.3.5 Marketing Strategy

2. Lesson Objectives Understand the product life cycle
Understand apply extension strategies to products
Understand the meaning of a product portfolio and the boston matrix.

3. The product life cycle
The product lifecycle visualises the different stages that a product will pass through over time.
Put the following terms in the order a product will go through
Decline
Growth
Product development
Introduction
Saturation
Maturity

4. How will the graph look?
Plot a graph on your whiteboard indicating how each stage will look in a line graph.

5. Product development The product is being researched and designed.
Ideas are developed, prototypes are made and tested.
Many products never make it past this stage.
Too risky
Lack of confidence in product
Expensive
This stage makes no revenue as no product has been sold

6. Introduction Here the product will be launched, sales are often slow
Can be very expensive depending upon scale of production, promotion etc
Product is likely to still not be profitable.
Price could be set to skim or penetrate the market, dependant upon the product.
Some products will be an instant success.

7. Growth Consumers are now aware of the product, sales may grow rapidly
New customers and enticed and there is repeat business
Production costs may decrease due to economies of scale.
Copycats may appear if sufficient protection is not in place, due to this price and promotion may need to alter

8. Maturity/Saturation Growth of sales will level off.
The product is established in the market place, with stable market share.
Sales will have peaked and competitors will have entered the market, making it saturated.
Some businesses may leave the market, others may use extension strategies.

9. Decline
For most products sales will decline, due to changing consumer tastes.
Companies often are sold or stop making the product.

10. Extending the life cycle
Sales
Time
Introduction
Growth
Maturity
Saturation
Decline

11. Extension Strategies
Find new uses for the products

12. Finding new markets for existing products

13. Develop a wider product range

14. Aiming the product towards specific target markets

15. Changing appearance or packaging

16. Update the product

17. Where do the following go on the product life cycle?