MemberMember

Louise Choy Louise Choy

Alex Yau Alex Yau

Eddie TungEddie Tung

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

Decline StageDecline Stage

Sales drop offSales drop off

profit dropprofit drop

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

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???