PRODUCT LIFE CYCLES

Product Life-Cycles Describes the change in consumer

demand over time & informs marketers when a change will be needed.

No Product lasts forever Trends, lifestyles, & tech all change

Traditional Life-Cycle Product Life Cycle has FIVE stages

Introduction Product Launch: the moment a new product is

introduced to the market.

Expensive!○ New machinery○ Design costs○ Promotions○ Advertising

This is why new products aren’t cheap.

Who buys this stuff? That guy that always wants to have the

newest gadgets… you know who he/she is.

Marketers call these people early adopters or trendsetters.

Who is that guy? He reads GQ, Cosmo, & In Style.

He loves to mimic celebrities… who get the products for free (marketing tool)

New Product – PUSH/PULL Marketers want to establish a connection

with consumers and their product very early.

Pull: Adverts, coupons, etc Push: dealer incentives, discounts, etc

A bigger PUSH Consignment: all the retailer to return any

unsold products

Shelf Allowance: marketers pay money to a retailer to provide the prime space in the store. Is this bribery?

Growth Stage After the product launches and establishes its initial

base it grows by:

Being Visible in advertisingVisible in daily lifeWord of Mouth

This stage is crucial. Will it take off or will it be a bust?

The faster, the better… The quicker a product grows in

popularity the more time it has to make a profit.

More advertisingLess competition

Obstacles… Market Share: is a company’s sales of goods or

services as a percentage of the total market. More competitors = smaller market share This is when the original product sees upgrades and added

features

Barriers To Entry: factors preventing a company from generating profit.Small marketCost of researchAdvertising expensesDesign and Production Costs

The Answer… A low-end Product…

Maturity Stage This is when the sales of a product

increase slowly, if at all.Marketers want to keep their brand name

out there.Often they have recouped all their

production/marketing cost and can now make a big profit.

Businesses take the money made in this phase to develop new products.

Decline Stage When there a no new customers for a

product, it is on the decline.

Quick Fix = Price Drop End Game = Pull it off the market

Decision Point Stage Time to pull the plug or remarket the

product with pricing or rebranding strategies…