1. Product Life Cycle Sports and Entertainment Marketing

2. Product Life Cycle  The product life cycle represents the stages that a product goes through during its life in the marketplace  Four stages:  Introduction  Growth  Maturity  Decline

3. Product Life Cycle

4. Introduction phase  Marketers focus on promoting consumer awareness and getting customers to try the new product  Companies spend MILLIONS to educate the consumer…..how?  Distribution is incredibly hard – how do you convince a store to carry it on their shelves? What was it!? What did it taste like? How did they get shelf space? How did they sell with only one flavor? How did they convince ppl it was beneficial?

5. Introduction phase  Skimming pricing- product pricing is high to cover R & D costs  Penetration pricing- low pricing in comparison to a competitor’s to quickly generate demand  Cost plus pricing- add together all costs to make the product, calculate how much it costs to make one, then add a markup percentage to figure out price.  Total costs for producing 10,000 units = $100,000  Cost per unit to make = $10  Add mark-up of 100% of cost = $10  Cost + mark-up = Selling price ($20)

7. Growth phase  More competitors enter the marketplace if they see the product is successful.  Who started competing against Gatorade?  To be competitive, the product must add new features or benefits  What did Gatorade do?  Distribution must remain aggressive –  How did Gatorade grow from just selling supermarkets?

11. Maturity phase  Sales begin to slow down  Are they for Gatorade?  Nope! Pepsi’s 4 th largest brand!  Repeat customers may stop buying the product  Difficult to gain new customers  Marketers use every last effort to identify to new buyers

13. Decline phase  Sales and profits begin to drop