1. Product & Product Life Cycles
Marketing
BUS 232
Product & Product Life Cycles
Dr. Mohammed A. Nasseef

2. What is a product Jobber (2004) gives a simple definition :
A product is anything that has the ability to satisfy a customer need

3. Delivery and installation
Characteristics Affecting Consumer Behavior
This CTR relates to Figure 5-2 on p.135 and previews the material on pp
Level of Product
Credit arrangement
Influences on Consumers
Cultural. Culture is the most basic influence on a person's values, priorities, and beliefs. Cultural shifts make marketing opportunities although most such changes are in secondary rather than core cultural values. Subcultures are important markets as these groups are often significantly different in their needs to warrant different marketing approaches.
Social. Social class is determined by a combination of income, occupation, education, wealth and other variables. Social factors within one's class that affect consumer behavior include reference groups & aspirational groups. Families also exert strong social influences. Finally, each relationship a person has with his or her group carries with it certain roles and status that may carry consumptive responsibilities.
Personal. Major personal factors are age and life cycle stage, occupation, economic situation, life style and personality/self-concept. Texts vary in their treatment of the PLC stages but it is clear that singles buy different products than do young marrieds with small children. Occupations differ in time constraints and social pressures to conform that affect consumption decisions. Lifestyles measured by AIO or VALS typologies can reveal different consumption patterns across otherwise dissimilar groups. The unique characteristics of each person that make up their personality also affect behavior.
Psychological. Maslow's hierarchy reminds marketers that need states vary in their intensity or motivation. Perception is the process of organizing stimuli and is influenced by selective exposure, distortion, & retention. Learning occurs in response to the presentation of information linked to relevant drives, cues, responses, and reinforcement only some of which is under the control of the marketer. Beliefs and attitudes, though shaped by cultural and social forces, may vary considerably on the individual level.
Quality
Core product
Features
And
styling
warranty
packaging
After sales service
Brand name
Delivery and installation

4. Product Life Cycles and Portfolio
Product Life Cycle – shows the stages that products go through from development to withdrawal from the market
Product Portfolio – the range of products a company has in development or available for consumers at any one time
Managing product portfolio is important for cash flow

5. Product Life Cycle (PLC):
Each product may have a different life cycle
PLC determines revenue earned
Contributes to strategic marketing planning
May help the firm to identify when a product needs support, redesign, reinvigorating, withdrawal, etc.
May help in new product development planning
May help in forecasting and managing cash flow

6. The Stages of the Product Life Cycle:
Development
Introduction/Launch
Growth
Maturity
Saturation
Decline
Withdrawal

7. The Stages of the Product Life Cycle
Saturation
Decline
Maturity
Growth
Development
Introduction
Sales
Time

8. The Development Stage Initial Ideas – possibly large number
May come from any of the following –
Market research – identifies gaps in the market
Monitoring competitors
Planned research and development (R&D)
Luck or intuition – stumble across ideas?
Creative thinking – inventions, hunches?
Futures thinking – what will people be using/wanting/needing 5,10,20 years

9. Product Development Stages
Market analysis – is it wanted? Can it be produced at a profit? Who is it likely to be aimed at?
Test Marketing – possibly local/regional
Analysis of test marketing results and amendment of product/production process
Preparations for launch – publicity, marketing campaign

10. Introduction/Launch:
Advertising and promotion campaigns
Target campaign at specific audience?
Monitor initial sales
Maximise publicity
High cost/low sales
type of product

11. Growth: Increased consumer awareness Sales rise Revenues increase
Costs - fixed costs/variable costs, profits may be made
Monitor market – competitors reaction?

12. Maturity: Sales reach peak Cost of supporting the product declines
Ratio of revenue to cost high
Sales growth likely to be low
Market share may be high
Competition likely to be greater
Monitor market – changes/amendments/new strategies?

13. Saturation: New entrants likely to mean market is ‘flooded’
Necessity to develop new strategies becomes more pressing:
Searching out new markets:
Linking to changing fashions
Seeking new or exploiting market segments
Linking to joint ventures – media/music, etc.
Developing new uses
Focus on adapting the product
Re-packaging or format
Improving the standard or quality
Developing the product range

14. Decline and Withdrawal:
Product outlives/outgrows its usefulness/value
Fashions change
Technology changes
Sales decline
Cost of supporting starts to rise too far
Decision to withdraw may be dependent on availability of new products and whether fashions/trends will come around again?