product life cycle

class 16

product life cycle

the stages a product goes through, from conception through development, market introduction, growth in sales, maturity, and eventually decline

development of a new product, introduction, growth, maturity, decline

what are the four stages of the product life cycle?

acquisition and research and development

two ways a firm may obtain new products

understanding

creating successful new products requires (blank) consumers, markets, and competitors

developing

creating new successful products requires (blank) products that deliver superior value to customers

product innovation/ideation, planning, sanity checks, testing, launch

what are the new product development stages?

idea generation

systematic search for new product ideas

internal idea sources

research and development, intrapreneurship

external idea sources

acquisitions, distributers and suppliers, competitors, customers

idea screening

reviewing new product ideas to spot good ones and drop poor ones as soon as possible

screening

where the suggestions from idea generation are ruled out

is it realistic for us?

r in r-w-w framework

can we win in the market?

first w in r-w-w framework

is it worth doing?

second w in r-w-w framework

product concept

a detailed version of the new product idea stated in meaningful consumer terms

prototype

physical mock-up or initial product

concept testing

testing new product concepts with groups of target consumers

present, symbolically or physically

concept testing method where you (blank) the concepts to customers (blank)

ask customers, reactions to the concepts

concept testing method where you (blank) to respond by answering questions about their (blank)

minimum viable product (mvp)

simplest version of a product that includes only the essential features needed to gather feedback and validate a concept with early users

situation analysis

marketing plan step where you ask what the business environment looks like

strategy development

marketing plan step where you ask who your target market is and what your value proposition for them is

implementation tactics

marketing plan step where you ask what your 4 Ps will be

financial projections

marketing plan step where you ask what the market size is

sanity checks

formally evaluate the value proposition and target market and your ability to create and capture value

business analysis

a review of the sales, costs, and profit projections for a new product

product development analysis

developing the product concept into a physical product

test marketing

introduces the product and its proposed marketing program into realistic market settings

marketing a product before full introduction

test marketing gives the marketer an experience with (blank)

time, costs

testing takes (blank) and (blank) can be high

controlled or simulated test markets

how can you reduce costs with test marketing?

new product launch

introducing a new product; usually not as simple as just making the product available to purchase

when to launch, where to launch, who to target

considerations for launching a new product

innovators

first individuals to adopt a new product often driven by a desire to be at the cutting edge of innovation

early adopters

opinion leaders who embrace new products early and influence others but are more deliberate in their adoption than innovators

early majority

adopts a product once they see its success among early adopters, representing the beginning of mainstream adoption

late majority

individuals who adopt a product after the majority has tried it, driven by necessity or social pressure, and are more skeptical of new innovations

laggards

the last to adopt a product, they prefer traditional methods and resist change unless absolutely necessary

chasm

refers to the gap between the early adopters and the early majority where many new products fail to gain traction

tornado

refers to the rapid growth phase when a product starts being adopted by the early majority

growth stage

characterized by the product achieving mainstream demand

mainstream

refers to the target market not the general public

maturity stage

characterized by settling into a stable level of market share

brand loyalty, differentiation, and fending off competitors

mature companies emphasize…

decline stage

characterized by reduced demand or a shrinking target market

downsize manufacturing and divest from products

what do companies often do when they hit the decline stage?

introduction marketing strategy

build awareness and interest; use price and promotion to get customers trying the product

growth marketing strategy

build engagement; use price either to capture or to control high demand

maturity marketing strategy

build loyalty; watch the competition closely

decline marketing strategy

maintain profitability by reducing costs, identify opportunities to divest or pivot

star in the bcg matrix

high market growth rate and high relative market share

question mark in bcg matrix

high market growth rate, low relative market share

cash cow in bcg matrix

low market growth rate, high relative market share

dog in bcg matrix

low market growth rate, low relative market share

maintain a star for as long as you can

star bcg matrix strategy

grow a question mark to build into a star

question mark bcg matrix strategy

milk a cash cow in order to fund maintenance and growth activities

cash cow bcg matrix strategy

downsize or divest from a dog to minimize or pivot to a new market

dog bcg matrix strategy

reinvent the brand or pivot to a new market

when a brand has begun to decline, it may be time to…

reinvent the brand

change the brand’s image to appeal to the contemporary target market

pivot to a new market

change the product or change the intended benefit