3. What is a Product Life Cycle?  The marketing theory that a product moves through different stages of life, from birth to death.  Every decision impacts the different stages of the cycle.  There are four stages to the product life cycle.

4. The Four Stages 1. Introduction 2. Growth 3. Maturity 4. Decline

5. Introduction  A product is introduced to the market.  Sales growth is usually low.  Early adopters are the primary buyers of the product or brand.

6. Growth  Sales are quickly increasing.  Competition is building. Result of other products that are very alike being created.  Early adopters continue to purchase and more people are beginning to purchase.

7. Maturity  Sales of this product are steady.  Competition is at the highest level. Hard to tell the differences between competing products.  Supply exceeds demand.

8. Decline  Sales decrease. Shifts in consumer preference Technological innovations  May need to be removed from the market.  Must sell large volumes to make money.

9. Impacts on Marketing Decisions  The four P’s of the Marketing Mix: Price Promotion Place Product

10. Pricing: What Price Will We Charge? 1. Introductory: o Prices high o Few to no competitors 2. Growth: o Prices lowered for customers and to beat competitors 3. Maturity: o Prices stabilized 4. Decline: o Prices lower

11. Promotion Decisions 1. Introductory: o Promotion is high o “Get the word out” 2. Growth: o Promotion remains high or increases o Focus shifts to persuading customers 3. Maturity: o Promotion level is steady o Advertising and Sales Promotion 4. Decline: o Level of promotion reduced

12. Place Decisions 1. Introductory: o Encouraging good channel members to offer the product o Businesses offer exclusive distribution rights 2. Growth: o Increases the number of distribution outlets 3. Maturity: o Building intensive distribution 4. Decline: o Unprofitable distribution outlets o Selective distribution occurs

13. Product Decisions 1. Introductory: o Offers a basic product 2. Growth: o Increases assortments o Offers new features and models 3. Maturity: o Product modified to appeal to new customers 4. Decline: o Alters or gets rid of the product