Understanding the Product Life Cycle and Branding Strategies

Product Life Cycle

A product life cycle outlines the stages a new product goes through in the marketplace.

Introduction Stage

This stage focuses on stimulating trial and creating demand.

Primary Demand

Demand for the product category as a whole.

Selective Demand

Demand for a specific brand within the product category.

Skimming

Setting a high initial price.

Penetration

Setting a low price to gain market share quickly.

Growth Stage

Characterized by rapid sales growth, increased competition, and peak profits.

Maturity Stage

Sales growth slows, and most buyers are repeat customers.

Decline Stage

Both industry and product sales decline.

Deletion

Remove the product from the product line.

Harvesting

Retain the product but reduce marketing costs.

Length of the Product Life Cycle

Varies depending on the product.

Shape of the Product Life Cycle

Different products exhibit different life cycle curves.

Generalized Life Cycle Curve

Typical bell-shaped curve.

High-learning Product

Slow initial growth due to customer education requirements.

Low-learning Product

Rapid growth due to ease of understanding.

Fashion Product

Fluctuations based on style trends.

Fad Product

Short life cycle with a rapid rise and decline.

Rate of Consumer Adoption

How quickly consumers adopt a product.

Categories of Adopters

Innovators (2.5%), Early adopters (13.5%), Early majority (34%), Late majority (34%), Laggards (16%).

Usage Barriers

Product incompatibility with existing habits.

Value Barriers

Lack of perceived benefits to change.

Risk Barriers

Concerns about physical, economic, or social risks.

Psychological Barriers

Cultural differences or negative image.

Category Development Index (CDI)

Measures the performance of a product category in a specific market segment relative to its national average.

Brand Development Index (BDI)

Measures the performance of a brand in a specific market segment relative to its national average.

Product Modification

Altering product characteristics.

Market Modification

Finding new customers.

Product Repositioning

Changing the product's perceived position in consumers' minds.

Branding

Using a name, phrase, design, or symbols to identify and differentiate products.

Brand Name

Any word, device, or combination used to distinguish a seller's goods or services.

Trade Name

The legal name under which a company does business (e.g., Coca-Cola Company).

Trademark

A legally registered brand name or trade name, granting exclusive use.

Brand Personality

Human characteristics associated with a brand.

Brand Equity

Added value beyond functional benefits that a brand name provides.

Brand Purpose

The reason for a brand's existence, its role in consumers' lives, and its contribution to society.

Brand Licensing

Allowing another company to use brand names or trademarks for a fee.

Multiproduct Branding

Using one name for all products in a product class.

Private Branding

Manufacturer produces products sold under a retailer's brand name.

Packaging

Any container in which a product is offered for sale, displaying label information.

Labeling

An integral part of the package, providing product identification, manufacturer details, instructions, and contents.