PRODUCT LIFE CYCLE (PLC)
Products Have Limited Life Product Sales pass thro Distinct Changes, each posing different challenges, opportunities, problems to the seller. Profits rise and fall at different stages of the Product Life Cycle. Products require different marketing, financial, manufacturing, purchasing and strategies in each life cycle stage.
STAGES & TYPES OF PRODUCT LIFE CYCLE
The Four Stages in PLC:- Introduction - Growth - Maturity - Decline
Three Special Types of Product Life Cycle:- Style :- A Style is a basic and distinctive mode of expression appearing in a field of human endeavourer. Styles Appear In:Homes:Colonial, Ranch, Cape God.
Clothing:- Formal, Casual, Funky
Art:Realistic , Surrealistic, Abstract.
- Fashion:- A Fashion is a currently accepted or popular style in a given field.
4 Stages of Fashion: Distinctiveness, Emulation, Mass Fashion, Decline. Length of Fashion Cycle:- Hard to Predict.
Fashion End- because they represent a purchase compromise and consumes start looking for missing attributes. FADS are fashions that come quickly into public view are adopted with great zeal, peak early and decline key part. Acceptance cycle is short, Tend to attract limited following for those searching for excitement / or want to distinguish from others.
PLC CHARACTERISTICS, OBJECIVES, STRAGIES
Introduction Stage:- Initially the pioneer is the sole supplier with 100% production capacity and sales. - Competitive penetration starts when a new competitor has built production capacity and initiates commercial sales. - Capacity tends to be over built during rapid growth. New Competitors do not enter and existing competitors Stabilize
their positions – A stage of share stability.
- Stability followed by commodity competition – Product is viewed as a commodity, buyers no longer pay a price preview. - Suppliers earn only an average rate of return. - At this point withdrawal begins.
Growth Stage:- Firms strategies to sustain rapid market growth. - New market segments.
- It increases the distribution average and enters new distribution channels.
- Shifts from Product Awareness to Product Preference AD. - Lowers the price to attract the next layer of price sensitive Buyers. - Improves product quality, new styling, new product features. - Adds new models – as flanker products that support the main product.
PLC CHARACTERISTICS, OBJECIVES, STRAGIES
Maturity Stage:- Most products are in the maturity stage of the life cycle. - Most Marketing managers cope with the problem of marketing the mature product.
Market Modification:- Volume = No. of. Brand users X usage rate per user. - Methods of Expansion of Product Sales thro Market Modification converting Non Users. - Entering new market segments. - Winning competitors customers. - Use the product on more occasions.
Product Modification:- Quality Improvement.
Marketing Mix Modification:- Prices - Distribution. - Advertising. - Sales Promotion.
- Personnel Selling.
- Services.
MARKET APPROACH IN THE DECLINE STAGE
- Increasing the firms investment.
- Maintaining the firms uncertainties about industry in resolved. - Decreasing the firms investment level selectively. - Harvesting the firms investment to recover cash quickly. - Divesting the Business quickly by disposing of its assets as advantagansly as possible
MARKET EVOLUTION
• Emergency
• Customer Survey Process
• Growth
• Intuitive Process.
• Maturity
• Dialectical Process.
• Decline
• Need hierarchy process.
SUMMARY OF PRODUCT LIFE-CYCLE CHARACTERISTICS, OBJECTIVES AND STRATEGIES
Introduction Characteristics Sales Costs Low Sales High cost Per Customer Rapidly rising sales Average Cost Per Customer Peak Sales Low Cost Per Customer Declining Sales Low Cost Per Customer Growth Maturity Decline
Profits
Customers Competitors
Negative
Innovators Few
Rising Profits
Early Adopters Growing Number
High Profits
Declining Profits.
Middle Majority Laggards Stable number beginning Declining Number
to decline
Marketing Objectives Create Product awareness and trial Strategies Product Price Maximize market share Maximize profit while defending market share Reduce expenditure and milk the brand.
Offer a basic product Charge Cost – Plus.
Offer product extensions, service, warranty Price to penetrate market
Distribution
Advertising
Build Selective distribution
Build product awareness among early adopters and dealers Use heavy sales promotion to entice trial
Build Intensive distribution
Build awareness and interest in the mass market Reduce to take advantage to heavy customer demand
Diversify brands and items models Price to match or best competitors’ Build more intensive distribution Stress brand differences and benefits Increase to encourage brand switching
Phase out weak. Cut price
Go selective: Phase unprofitable outlet.
Reduce to level new to retain hard-core loyal Reduce to minimal level
Sales Promotion