Product Life cycle

Product life cycle

length of time a product is introduced to consumers into the market until it's removed from the shelves.

-broken down into 4 stages: development, growth, saturation, and decline

-helps inform business decision making, from pricing &promotion to expansion or cost cutting

-newer, more successful products push older ones out

Development

This phase generally includes a substantial investment in advertising and marketing campaigns focused on making consumers aware of the product and its benefits.

-low sales, financial losses, innovative customer

growth

if the product is successful, it then moves to the growth stage. this chareterized by growing demand, an increase in production, and expansion in its availability.

-increasing sales, profits rise, more competitors

saturation/ maturity

This is the most profitable stage, while the cost of production and marketing declines.

-peak sales, stable number of competitors, profits are high.

decline

a product takes on increased competition as other companies emulate its successes - sometimes with enhancements or lower prices. The product may lose market share and begin its decline.

-falling sales, profits fall, cost per customer is low

extension strategies

-Business will try an extend the lifecycle of a product and prevent it from going in decline.

-extension of strategies is introduced between maturity and saturation stages of product before decline happens- aim is to maintain a steady rate.

strategies: repostioning of the product

-involves exploring new markets for a product, reviving the product by testing new uses for it. adding value to appeal to a different audience.

e.g introducing a different size version of a product.

Strategy: rebranding the product

tierd - Looking branding and packaging can put customers off. refreshing the brand and packaging design can appeal to new customers and convince previous customers to try a product again.

Strategy: increasing marketing activity

Running new advertising campaigns and new sales promotions can attract new customers, remind previous customers that a product still exists, and encourage existing customers to buy more of a product.

Strategy: product differentiation

making a product stand out from its market competitors- by highlighting the difference between it and other products.

ensuring a product has a unique selling point

-a good way to differentiate from other products

Strategy: reducing the price of product

The moment a product has reached maturity it may face competition from other products. When this happens, the business may no longer be able to charge such a high price for the product. if the price is reduced existing cutomers are likely to continue buying it while other cutomers may swith from competing products.