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Product Life Cycle StrategiesProduct Life Cycle Strategiesbyby

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Product Life-Cycle Marketing Strategies

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y To say that a product has a life cycleasserts four things

1. Products have a limited life.

2. Product sales pass through distancestages, each posing different challenges,opportunities, and problems to the seller.

3. Profits rise and fall at different stages ofthe product life cycle.

4. Products require different marketing,

financial, manufacturing, purchasing, andhuman resource strategies in each life-cycle stage.

Not all product follow this product lifecycle

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y Introduction Stage

y High distribution cost because

much money is needed to attract

distributors and build inventories.

y Promotion spending is relatively

HIGH to

y Inform, induce trial, secure

distribution in retail outlets.y Must also decide when to enter

the market

Product Life-Cycle Marketing

Strategies

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y Growth Stagey New competitors enter. Market will

expand. Distribution outlets increases.y

Profits increasesy The firm must do the following tosustain rapid market growthy Improve product quality and add new product

features and improved styling

y Add new models and flanker products

y Enter new market segments

y Increase distribution coverage and enter newdistribution channels

y Shift from product-awareness advertising toproduct-preference advertising

y Lower prices to attract next layer of price-sensitivebuyers

Product Life-Cycle Marketing

Strategies

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y Maturity Stage

y Lasts longer than previous stages,

most products are in the maturity

stage and therefore most ofmarketing management deals with

the mature product.

y Strategies:

y Market Modification

y Volume=number of brand user x

usage rate / user

Product Life-Cycle Marketing

Strategies

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y Expand number of brand users by:

1. Converting nonusers

2. Entering new market segments

3. Winning competitors customers

y Convince current users to increase usage

by:

1. Using the product on more occasions

2. Using more of the product on each

occasions

Product Life-Cycle Marketing

Strategies

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y Decline Stagey Sales may decline for many

reasons y

Carrying a weak productcan be very costly to afirm.

y Strategies1. Increase firms investment (to

dominate the market and

strengthen its competitiveposition)2. Maintain the firms investment

level until the uncertaintiesabout the industry are resolved.

Product Life-Cycle Marketing

Strategies

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1. Decrease the firms investmentlevel selectively by droppingunprofitable customer groups,while simultaneouslystrengthening the firmsinvestment in lucrative niches

2. Harvesting (milking) thefirms investment to recovercash quickly

3. Divesting the business quicklyby disposing of its assets asadvantageously as possible.

Product Life-Cycle Marketing

Strategies

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PRESENTATION

y Article : Using sense to build powerful brands

y Article : Too many flops

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GOOD NEWS

y 1st draft is due

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NEXT SESSION

y Pricing

y Article: Pricing to capture value

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