PRODUCT LIFE CYCLE

• PRODUCT LIFE CYCLE
• MARKETING MGMT
• BY DR SHASHI
• MEANING OF PRODUCT LIFE CYCLE
• PRODUCT LIFE CYCLE STAGES DEVELOPED BY RAYMOND VERNON IN 1966. THE PRODUCT LIFE CYCLE STAGES OR INTERNATIONAL PRODUCT LIFE CYCLE WHICH WAS DEVELOPED BY THE ECONOMIST BY RAYMOND VERMON IN 1966
• ACCORDING TO HIM THERE ARE FOUR STAGES IN PRODUCT LIFE CYCLE : INTRODUCTION,GROWTH,MATURITY AND DECLINE. THE LENGTH OF STAGE VARIES FOR DIFFERENT PRODUCT,ONE STAGE MAY LAST SOME WEEKS WHILE OTHERS EVEN LAST DECADE. THIS SHOWS PRODUCT LIFE CYCLE IS VERY SIMILAR TO THE DIFFUSION OF INNOVATION MODEL WAS DEVELOPED BY EVERTT ROGERS IN 1976.
• THE PRODUCT LIFE CYCLE IS POPULARIZED BY THEODORE LEVITT AND OTHER LIKES C.R.WASSEN,B.CARTY,M . CHEVALIER,D.J LUCK,D.T.KOLLAT ETC FURTHER DEVELOPED THE CONCEPT
• THE PRODUCT LIFE CYCLE ( FIVE STAGES)
• THE PRODUCT LIFE CYCLE IS AN IMPORTANT CONCEPT IN MARKETING. IT DESCRIBES THE STAGES OF A PRODUCT GOES THROUGH FROM WHEN IT IS WAS FIRST THOUGHT OF UNTIL IT IS FINALLY REMOVED FROM THE MARKET. IT INVOLVES FIVE DISTINCT STAGES:-

1. PRODUCT DEVELOPMENT
2. INTRODUCTION
3. GROWTH
4. MATURITY
5. DECLINE

• PRODUCT DEVELOPMENT STAGE

1. IDEA GENERATION
2. IDEA SCREENING
3. CONCEPT DEVELOPMENT AND TESTING
4. BUSINESS ANALYSIS
5. PRODUCT DEVELOPMENT
6. TEST MARKETING AND COMMERCIALIZATION

• PRODUCT LIFE CYCLE
• PHILIP KOTLER ,” THE PRODUCT LIFE CYCLE IS AN ATTEMPT TO RECOGNIZE DISTINCT STAGES IN SALES HISTORY OF THE PRODUCT
• PLC CONCERNS WITH THE STUDY OF THE DEGREE OF PRODUCT ACCEPTANCE BY THE MARKET OVER TIME. IT INCLUDES MAJOR RISES AND FALLS OF SALES DURING ITS LIFE.
• THE PRODUCT LIFE CYCLE IS A CONCEPTUAL REPRESENTATION. IT IS A PRODUCT AGING PROCESS. JUST AS HUMAN BEINGS HAVE A TYPICAL LIFE CYCLE GOING FROM CHILD HOOD,ADOLESCENCE,YOUTH AND OLD AGE,SO ALSO PRODUCT FOLLOW A SIMILAR ROUTE.
• PRODUCT LIFE CYCLE IS SIMPLY GRPAHIC PORTRAYAL OF THE SALE HISTORY OF A PRODUCT FROM THE TIME IT IS INTRODUCED TO THE TIME WHEN IT IS WITHDRAWN
• PRODUCT LIFE CYCLE

1. PRODUCT MOVE THROUGH THE CYCLE OF INTRODUCTION,GROWTH,MATURITY AND DECLINE AT DIFFERENT SPEED
2. BOTH SALES VOLUME AND UNIT PROFIT RISE CORRESPONDING TILL THE GROWTH STAGE, HOWEVER IN THE PRODUCT OF MATURITY STAGE SALES VOLUME RISES BUT PROFIT FAILS
3. THE SUCCESSFUL PRODUCT MANAGMENT NEED DYNAMIC FUNCTIONAL APPROACH TO MEET THE UNIQUE SITUATIONS OF SALES AND PROFITABILITY,

• DIAGRAM
• 
  
• IMPORTANT IMPLICATIONS

1.     MOSTLY IT IS ASSUMED THAT PRODUCT FOLLOWS THROUGH HIS FOUR PHASE LIFE CYCLE ,NOT ALL PRODUCTS INTRODUCED IN THE MARKET ESSENTIALLY FOLLOW THROUGH ALL THESE FOUR STATES. QUITE POSSIBLE THAT PRODUCT MIGHT CROSS FIRST AND SECOND STAGE BUT DIE PREMATURE DEATH

2.     ONE CAN NOT HAVE A DEFINITE LINE OF DEMARCATION

3.     NO TWO PRODUCTS HAVE IDENTIFIED LIFE CYCLE

4.     SAME PRODUCT MIGHT REACH DIFFERENT STAGES IN DIFFERENT MARKET SEGMENTS.

• INTRODUCTION STAGE
• FEATURES
• NEW PRODUCT IS LAUNCHED COMMERCIALLY
• PROFIT ARE NEGATIVE
• SALES ARE LOW
• HEAVY DISTRIBUTION EXPENSES AND HEAVY PROMOTIONAL EXPENSES
• MARKETING STRATEGIES
• RAPID SKIMMING STRATEGY:-HIGH PRICE AND HIGH PROMOTION
• SLOW SKIMMING STRATEGY:- HIGH PRICE AND LOW PROMOTION
• RAPID PENETRATION:- LAUNCHING NEW PRODUCT AT LOW PRICE AND HIGH PROMOTION
• SLOW PENETRATION:-LOW PRICE AND LOW PROMOTION
• GROWTH STAGE
• FEATURES

1. RAPID CLIMB IN SALES
2. THE EARLY ADOPTERS LIKE THE PRODUCT AND MIDDLE MAJORITY CONSUMERS START FOLLOWING THE LEAD.
3. NEW OPPORTUNITIES FOR LARGE SCALE PRODUCTION AND PROFIT
4. INTRODUCES NEW FEATURES
5. INCREASE COMPETITION

• MARKETING STRATEGIES
•  IMPROVE PRODUCT QUALITY
• ENTER NEW MARKET SEGMENTS
• NEW DISTRIBUTION CHANNELS
• PRODUCT CONVICTION AND PURCHASE
• REDUCTION IN PRICE AT APPROPRIATE TIME TO ATTRACT MORE BUYERS
• MARKET EXPANDING STRATEGIES
• MATURITY STAGE
• FEATURES

1. SALES INCREASE AT DECREASING RATE AND INTENSIFICATION OF COMPETITION. EFFORTS ARE MADE TO LEVEL THE SALES OR THE SALES CURVE BY EXTENSION STRATEGIES AND A STAGE COMES TO MARKET SATURATION
2. NORMAL PROMOTIONAL EXPENSES
3. UNIFORM AND LOWER PRICES

• MARKETING STRATEGIES
• MARKETING MODIFICATION:-

1. NUMBER OF BRAND USERS
2. USAGE RATE PER USER

• PRODUCT MODIFICATION
• MARKETING MIX MODIFICATION
• EXTENSION STRATEGIES DURING MATURITY

1. DEVELOPMENT OF NEW MARKET
2. DEVELOPMENT OF NEW USES
3. DEVELOPMENT OF MORE FREQUENT USES
4. DEVELOPMENT OF WIDER RANGE OF PRODUCTS
5. DEVELOPMENT OF STYLE CHANGES

• DECLINE
• THREE OPTIONS

1. MAINTAIN THE PRODUCT IN HOPE THAT COMPETITOR WILL EXIT .REDUCE THE COSTS AND FIND NEW USERS FOR THE PRODUCT
2. HARVEST IT  AND REDUCE THE MARKETING SUPPORT
3. DISCONTINUE

• DECLINE STAGE
• FEATURES

1.     DECLINE OF SALE :-

2.     TECHNOLOGICAL ADVANCES

3.     CONSUMER SHIFT IN TASTES

4.     INCREASED COMPETITION

5.     RAPID FALL IN SALES

6.     FURTHER FALL IN PRICES

7.     NO PROMOTIONAL EXPENSES

• MARKETING STRATEGIES

1.  PRODUCT IS WITHDRAWN
2. REDUCE THE NUMBER OF OFFERINGS
3. CUT THE PROMOTION BUDGET

• PROSPECTS

1. IN SALES FORECASTING
2. IN PRODUCT PLANNING
3. PRODUCT PRICING
4. PRODUCT CONTROL
5. IN ADVERTISING

• PROBLEM

1. ABSENCE OF ABSOLUTE CONFORMITY
2. STAGE SPAN FLUCTUATES

• EXAMPLES

·         TYPE WRITER,VCR ARE OUTDATED

·         THE RISE OF ELECTRIC VEHICLE SHOWS MORE OF GROWTH STAGE OF THE PRODUCT LIFE CYCLE COMPANIES LIKE TESTLA