ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 1
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 2
PLC - Product Life Cycle
• The purpose of having a diagram is to
help you understand the changes, in the
revenue that is made, as you go
through the different stages of selling a
product, from the beginning, to the end.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 3
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
The time at each stage varies
greatly
Page 336 in 8th Edition
Page 260 in 9th Edition
DVD
Mini-disc
Electric cars
VR*
*= virtual reality
Digital
cameras
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 4
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Introduction
The seller tries to stimulate demand
Promotion campaigns to get increase public awareness
Explain how the product is used,
• Features Advantages Benefits
You will lose money, but you expect to make profits in the
future
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 5
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Introduction
•Sales are low, and profits are below the line because your
costs are greater than the amount of money you make
•you have “negative” profit
•Need to spend a lot of money on promotion
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 6
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Growth
A lot is sold - The seller tries to sell as much as possible
Other competitor companies watch, and decide about
joining in with a competitor product
“success breeds imitation” (Text)
Growth will continue until too many competitors in the
market - and the market is saturated
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 7
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Growth
•At the end of the growth stage, profits start to decline
when competition means you have to spend more money
on promotion to keep sales going.
•Spending money on promotion cuts into your profit
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 8
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Maturity
Many competitors have joined - the market is saturated
The only way to sell is to begin to lower the price - and
profits decrease
It is difficult to tell the different between products since most
have the same F.A.B. - Features, Advantages & Benefits
Competition can get “Nasty” and commercials are intense
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 9
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Maturity
“Persuasive Promotion” becomes more important during
this stage
That is to say, you have commercials almost begging the
customer to still buy your product because you still make it
just as good.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 10
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Decline
Newer products are now more attractive - even a low low
price does not make consumers want to buy.
Profit margin declines - and so the only way to make
money is to sell a high volume
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 11
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
Decline
To increase volume you try to
1. Increase the number of customers - get new customers
2. Increase the amount each customer uses
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 12
1. Increase frequency of use
by present customers
2. Add new users
3. Find new uses
4. Change product quality or
packaging
Extending the Product Life Cycle
Market
Modification
Product
Modification
Purpose: to sell more product and cover original investment
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 13
Extending the product Cycle
• to prevent the product going into
decline you modify the market
MARKET MODIFICATION
• you look for new consumers by
changing the product so it has new
users - and then new customers
(Baking soda, vinegar, Q-tips, Avon
Skin So Soft, vaseline
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 14
Extending the product Cycle
• MARKET MODIFICATION
examples
Windex for cleaning jewelry
Javex bleach for toilets
Lemons for hair colouring
beer for hair
Bounce for in the garbage, gym bag etc.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 15
• to prevent the product going into
decline you modify the product
PRODUCT MODIFICATION
• adding new features, variations, model
varieties will change the consumer
reaction - create more demand
• therefore you attract more users
Extending the product Cycle
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 16
• PRODUCT MODIFICATION
• examples
• condoms - colours, features
• CD players
• chip flavours - many kinds
• flavoured tongue depressors
• couples seats at movie theatre
Extending the product Cycle
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 17
• PRODUCT MODIFICATION
• examples continued
• digital sound at theatres
Extending the product Cycle
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 18
Overlap of Life Cycle for Products A and B
WINDOWS 95
1991
1995 1996
1997
WINDOWS 3.1
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 19
Most people have a problems thinking
this theory is relevant because they
apply it to specific product brands - it
should be applied only to a general
product category
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 20
Length of Cycle Stages
• Products move through the cycle at different
speeds
• sometimes introduction is very long, or very
short, depending on how easy it is for the
public to understand the F.A.B.
• Not all products follow the same pattern
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 21
Life Cycle Length
• Some products move very fast because
they are new and have no competition
so the intro stage is short, and they go
direct to growth stage.
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 22
Life Cycle Length
Because of
• technology and
• globalization
• the introduction stage is getting very
short
• some cycles more quickly to maturity,
then have many product modifications
so the decline stage drags on and on
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 23
Speed of the PLC
• Since the Intro Stage is getting shorter,
and sometimes the Growth Stage
doesn’t last too long (because
competitors move in) companies must
continually come up with new products
• You can tell when they are in the growth
stage because this is when they
introduce new model variations, and
some improvements to the product
Page 340
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 24
Alternative Product Life Cycles
Tamagachi
Pocket pagers
Failures that do not go
through the 4 steps
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 25
• Fashions - currently popular
products that tend to follow recurring
life cycles
eg. Wide lapels, 3 button suits, high
heels vs. wedge heel
• “the currently acceptable style” p. 265
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 26
• Fads - Fashions with abbreviated life
cycles - only popular with certain
groups
• - music
• - fast food
• - children’s toys
• - “adult toys”
Page 265
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 27
Eg. Watches w red LCD
Page 188
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 28
Product Life Cycle Considerations in
Marketing Strategy
• Understand that profits have a predictable
pattern
•
in the early stages, focus is on product
information
•
in the later stages, focus is on brand
promotion
• use market segmentation in maturity stage to
maintain strong core customer basis
Page 188
ppt slides created and Copyright by Prof. Tim Richardson www. witiger. com
Slide 29
Stages in the Product Life Cycle
Introduction Growth Maturity Decline
The time at each stage varies
greatly
Mini-disc
Electric cars
*= virtual reality
Digital
cameras
Monopoly Monopolistic Oligopoly Pure Competition