Managing Product Life Cycle

Product Life Cycle

The concept that describes the stages a product goes through from introduction to decline.

Introduction Stage

The phase where the product is launched, aiming to stimulate trial and establish primary and selective demand.

Growth Stage

The stage characterized by rapid sales growth, increased competition, and peak profits.

Maturity Stage

The phase where industry/product sales slow down, there are fewer new buyers, and profits decline.

Decline Stage

The stage where industry/product sales drop, prices decrease, and environmental changes occur.

Deletion Strategy

A strategy to handle a declining product by dropping it from the market.

Harvesting Strategy

A strategy to manage a declining product by cutting marketing costs while continuing to sell it.

Length of the Product Life Cycle

The duration from the introduction of a product to its decline.

Shape of the Life-Cycle Curve

The graphical representation of the product life cycle stages, which can vary in shape based on the product type.

High-Learning Product

A product that requires significant education for consumers to understand and use effectively.

Low-Learning Product

A product that requires little learning for consumers to use, allowing for quicker adoption.

Branding Importance

The significance of creating a strong brand identity to differentiate products in the market.

Packaging Role

The function of packaging in marketing, which includes protecting the product and attracting consumers.

Labeling Role

The purpose of labeling in marketing, providing information and promoting the product.

Gatorade

A global, multibillion-dollar brand established in 1965, known for its sports drinks and continuous product development.

G Series

A line of Gatorade products including chews, bars, powders, and shakes designed for serious athletes.

Marketing Objectives

Goals set by marketing executives to guide their strategies, such as gaining awareness or maintaining brand loyalty.

Price Skimming

A pricing strategy where a high price is set initially and then lowered over time.

Penetration Pricing

A pricing strategy where a low initial price is set to attract customers and gain market share.

Selective Demand

The demand for a specific brand or product as opposed to the overall category.

Primary Demand

The demand for a product category as a whole, rather than for a specific brand.

Advertising for Selective Demand

Promotional efforts focused on encouraging consumers to choose a specific brand over competitors.

Fashion product

A style of the times.

Fad product

Short life cycle.

Product class

The entire product category or industry.

Product form

Variations of a product within the product class.

Innovators

2.5 percent of the consumer population.

Early adopters

13.5 percent of the consumer population.

Early majority

34 percent of the consumer population.

Late majority

34 percent of the consumer population.

Laggards

16 percent of the consumer population.

Usage barriers

Compatible with habits.

Value barriers

Incentive to change.

Risk barriers

Physical, economic, social.

Psychological barriers

Culture or image.

Electric cars

In 2022, only 6 percent of cars sold were all-electric-powered cars.

Product/brand manager responsibilities

Manage product life cycle stages, new-product development, marketing program implementation, extensive data analysis.

Category Development Index (CDI)

% of a product category's total U.S. sales in a market segment divided by % of the total U.S. population in a market segment.

Brand Development Index (BDI)

% of a brand's total U.S. sales in a market segment divided by % of the total U.S. population in a market segment.

Product modification

Includes product bundling and new characteristics.

Market modification

Finding new customers, increasing a product's use, creating a new use situation.

Product repositioning

Changing the place product occupies in consumer's mind.

Shrinkflation

Changing the amount in package. Less product in package while maintaining the package size, dimension, and price.

Branding

The process of creating a unique name and image for a product in the consumers' mind.

Brand name

The name given to a product or service that distinguishes it from others.

Trademark

A symbol, word, or words legally registered or established by use as representing a company or product.

Brand personality

The set of human traits attributed to a brand.

Brand equity

The value added to a product by having a well-known brand name.

Brand purpose

The reason a brand exists beyond making money.

Creating brand equity

1. Develop positive brand awareness and association with a product class. 2. Establish a brand's meaning in the minds of consumers. 3. Elicit the proper response to brand's meaning. 4. Create intense brand loyalty with consumers.

Valuing brand equity

The financial advantage provided by a brand, which can be bought and sold.

Brand licensing

The practice of allowing another company to use a brand name for a fee.

Good brand name characteristics

A brand name should suggest product benefits, be memorable, distinctive, and positive, fit the company or product image, have no legal or regulatory restrictions, be simple and emotional, and have favorable phonetic and semantic associations in other languages.

Multiproduct branding

A branding strategy where a single brand name is used for multiple products.

Product line extensions

Using a brand name to enter new markets in its product class.

Subbranding

Combines a corporate brand with a new brand.

Brand extension

Using a current brand name to enter a different product class.

Co-branding

Pairs two strong brands for mutual benefit.

Multibranding

A branding strategy where each product gets a different name.

Private branding

Also known as private labeling or reseller branding.

Mixed branding

A strategy that includes its own products plus a reseller's.

Packaging

The technology of enclosing or protecting products for distribution, storage, sale, and use.

Label

A piece of paper, plastic, or other material that provides information about a product.

Packaging/labeling cost

Cost $0.15 of every dollar spent by consumers.

Communication benefits

Information provided for consumers through packaging.

Functional benefits

Benefits related to storage, convenience, or protection.

Perceptual benefits

Benefits that create a brand in the consumer's mind.

Pez Candy

1,400 characters, 90 countries, licensed character heads, consumers buy 70 million Pez dispensers, sell 5 billion Pez tablets/year.

Connecting with customers

Design and appeal challenges faced by packaging designers.

Environmental concerns

Challenges related to reducing waste in packaging.

Health, safety, and security issues

Expect packages to be safe and secure, including considerations for shelf life.

Shelf life

The time a product can be stored.

Cost reduction

The challenge of cutting costs while delivering value.

Brainstorming Ground Rules

1. Strive for quantity of ideas, 2. 'Piggybacking' on ideas is encouraged, 3. Stress creativity, 4. No evaluation or criticism allowed.

N ∕ 3 Ground Rules

1. Divide total ideas (N) by 3 for points allocation, 2. Each student awards points to ideas, 3. Tally amounts for each idea.

Justin's Video Case

Focuses on managing a successful product with passion.

Branding strategies

Strategies used by Hormel and how Justin's products fit into the Hormel product line.

Sustainability considerations

Likely to influence the future at Justin's.

Consumer purchase

Consumers buy 70 million Pez dispensers.

Pez tablets sales

Sell 5 billion Pez tablets/year.

Design appeal

The visual attractiveness of a product's packaging.

Waste reduction

Efforts to minimize waste in packaging processes.

Safety expectations

Consumer expectations for packaging to ensure health and safety.

Value delivery

The process of providing worth to customers through cost-effective packaging.

Trading Up

Trading up involves adding value to the product (or line) through additional features or higher quality materials.

Trading Down

Trading down involves reducing a product's number of features, quality, or price.