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Product Life CycleProduct Life Cycle
DefinitionDefinition
5 stages 5 stages Product developProduct develop Introduction Introduction GrowthGrowth MaturityMaturity declinedecline
PLC
TimeProduct
DevelopmentStage
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
Sales and Profits Overthe Product Life FromInception to Demise
ProductProductDevelopment StageDevelopment Stage
Find and develop new product idea Find and develop new product idea
Sales = 0 Sales = 0
Investment Cost Investment Cost
Introduction StageIntroduction Stage Product introduced to marketProduct introduced to market
Low salesLow sales
No profit (heavy expense)No profit (heavy expense)
Create product awareness and trialCreate product awareness and trial
Growth StageGrowth Stage Rapid market acceptanceRapid market acceptance
Profit increase Profit increase
Sales increase rapidlySales increase rapidly
Maximize market shareMaximize market share
Maturity StageMaturity Stage Sales growth slow down Sales growth slow down
Profit level off or declineProfit level off or decline against competition against competition
Maximize profit while defend Maximize profit while defend market sharemarket share
Real Life ExampleReal Life Example
Broadband networkBroadband network
Mobile phone Mobile phone
PagerPager
Broadband NetworkBroadband Network Introduction stage Introduction stage
Build product awarenessBuild product awareness
Broadband NetworkBroadband Network Use heavy sales promotion & Use heavy sales promotion &
advertisement advertisement attract more new customersattract more new customers
Building and retaining market Building and retaining market leadershipleadership
Mobile phone Mobile phone
Early 1990s: growthEarly 1990s: growth
Late 1990s to now: maturityLate 1990s to now: maturity
Mobile phoneMobile phone Diversity brand and modelsDiversity brand and models
Price to match or best competitorsPrice to match or best competitors eg, cut price eg, cut price
improve the qualityimprove the quality
Mobile phoneMobile phone Use attractive advertisementUse attractive advertisement
stress brand differences & benefitsstress brand differences & benefits specific imagingspecific imaging
Adding new function & servicesAdding new function & services
PagerPager 1980s to early 1990s: 1980s to early 1990s:
growth and maturity stagegrowth and maturity stage
Many pager companies in the Many pager companies in the marketmarket
Some new models of pager are Some new models of pager are introducedintroduced
Pager Pager Decline stage nowDecline stage now
Started when mobile phone Started when mobile phone became popularbecame popular
Many bad-established companies Many bad-established companies closed downclosed down
PagerPager
Add more functions of the pagerAdd more functions of the pager to attract more people use pager againto attract more people use pager again eg, horse-racing information, stock eg, horse-racing information, stock
market informationmarket information
Co-operate with some other companyCo-operate with some other company
Sport ShoeSport Shoe Exception case: decline -Exception case: decline - rebirth rebirth New fashion trend: New fashion trend:
Low-tech sport shoe is more preferable Low-tech sport shoe is more preferable than high-tech sport shoe.than high-tech sport shoe.
Fashions are short lived, but often Fashions are short lived, but often return in a long term cyclereturn in a long term cycle..
PLCPLC Well preparation in introduction Well preparation in introduction
stage???stage???
Maintain longer growth and maturity Maintain longer growth and maturity stage???stage???
Avoid the product enter the decline Avoid the product enter the decline stage so quick???stage so quick???
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