MKTG CH 8 - product life cycle

product life cycle

1. intro
2. growth
3. maturity
4. decline

intro stage

* new product launched
* profits negative or low
* promotion spending relatively high
* often basic versions of the product are produced and introduced
* more ads
* no competition
* general marketing objective: awareness

growth stage

* sales climb quickly
* new competitors enter the market
* increase in comp leads to increase in distribution outlets
* profits also may increase during growth stage
* general marketing objective: product differentiation

maturity stage

* slow product growth
* slowdown in sales growth results in many producers with many products to sell
* comp begin marking down prices
* increase ads and sales promotions
* increase product development budgets
* lead to drop in profit

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* general marketing objective: brand loyalty

decline stage

* sale of most product forms and brands eventually dip
* management may decide maintain brand without change in hope comp will leave industry
* management may harvest a product
* reducing various costs = plant and equipment, maintenance, R&D, ads, sales
* hoping sales hold up
* management may decide to drop the product from product line

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* general marketing objective: product rationalization

high learning product life cycle

* has the most time
* ex: computers, airplanes
* typical product life cycle

low learning products

* unit sales don’t drop during decline stage
* ex: detergent, red bull
* products are very simple and easy to learn

fad products

* grow too at beginning
* ex: pokemon GO
* the rate of growth at intro stage is the same as decline stage

fashion products

* a constant cycle repeating
* baggy jeans
* middle part

extending product life cycle

1. modifying the product
2. modifying the market
3. repositioning a product
4. introducing a new product

modifying the product

* product improvements
* line extenstions
* addition of new item to an existing product line
* flavours, colours, new forms etc…

modifying the market

* finding new customers
* ex: harvey davidson targeting females
* increase product’s use
* creating a new use situation

repositioning a product

* ex: motorola updated modern version of flip phone

introduce a new product

ex: beyond meat burger

3 types of product innovation

1. minor innovation
2. continuous innovation
3. radical innovation

adoption curve

* how willing people will buy/try a product over time

barriers that deter adoption

* usage barriers
* value barriers
* risk barriers
* psychological barriers

Strategic appraoches to growth in a current market

* market penetration
* finding ways to make current products appeal to current customers
* product development
* reaching current customers with a new product

strategic appraoches to growth in a new market

* market development
* reaching new customers with current product
* diversification
* reaching new customers with a new product

7 steps to new product development process

1. new product development strat
2. idea generation
3. screening and evaluation
4. business analysis
5. development
6. test marketing
7. commercialization

new product development strat

* identify new product development focus that meets company objectives

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* marketing methods used
* SWOT analysis

idea generation

* brainstorm new ideas

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* methods used
* ideas from employees, co workers and consumers

screening and evaluation

* evaluate product ideas and develop concepts

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* methods used
* internal evaluation of technical requirements, external concept tests

business anaysis

* identify products features and its marketing strat and make financial projections

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* methods used
* products key features and anticipated marketing mix

test marketing

* test product and marketing strat in marketplace on limited scale

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* methods used
* test marketing in defined areas

development

* create prototype and test it internally at the company and externally with consumers

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* methods used
* internal company assessments and external tests on product prototypes

commercialization

* launch an fully market the product in martketplace

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* methods used
* implement all areas of the marketing mix
* possible regional rollout