1. Product Life Cycle
5.1 continued

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

4. Introduction
Occurs when the product is first introduced into the marketplace
Focus on promoting consumer awareness and getting customers to try the new product
Skimming Pricing: high pricing to cover research and development costs
Penetration Pricing: price a new product low in comparison to other products in order to quickly create demand

5. Growth
More competitors enter the market if they see that a new product is successful
Power Aid and Sportsade in response to Gatorade
To be competitive at this stage, the product may be improved by adding new features or new products in that line
Adding distribution outlets in important at this phase
From just convenience stores and supermarkets to vending machines

6. Maturity
Sales begin to slow down for the product category or just the product
Repeat customers may stop buying the product
New buyers are difficult to attract

7. Decline When sales and profits begin to drop
Technological advances can cause enter product categories to enter the decline stage
Companies end up dropping products in the decline phase from their product line

8. Some Considerations Not all products fit the life-cycle patterns
FADS: products that become popular quickly and lose popularity just as quickly
Koosh Balls

9. Management of the Product Life Cycle
Product managers need to manage a product through its life cycle
Three Ways
Modify the product
Market the product
Reposition the product

10. Product Modification Changing the product’s characteristics Features
Appearance
Packaging Design
Gatorade Fierce, Gatorade Ice, Gatorade Xtremo

11. Market Modification
Strategy to find new customers or to encourage current customers to use more of the product
Gatorade Frost

12. Repositioning
Involves changing a product’s image in relation to its competitor’s image
A change in any one of the 4 P’s can cause this change
New Balance: redesign its athletic shoes for older people who have wider feet
No longer have to compete with Nike and Reebok directly
Change their promotions to reach older people.