Product life cycle
sales
profits
introduction growth maturity decline
Product life cycle
• Introduction • Growth• Maturity• Decline
Introduction • Firms seeks to build a product awareness and develop
a market for the product. The impact of marketing mix:• Product branding and quality level is established and
intellectual property protections like patents , copy rights etc are obtained
• Pricing may be low penetration pricing to build market share rapidly and high skim pricing to recover development cost
• Distribution is selective until the customers show the acceptance of the product
• Promotion is aimed at innovators and early adopters
Marketing strategy: introduction stage• Profits are negative /low • Promotional expenditure are at their highest ratio
to sales• Decide when to enter the market– To be first– To come in later
• Market pioneer advantage
Growth• Firms seeks to build brand preference and increase
market share.• Product quality is maintained and additional
features and support services may be added • Pricing is maintained as the firm enjoys increasing
demand with little competition• Distribution channels are added as demand
increases and customers accept the product• Promotion is aimed at broader audience
Marketing strategy : Growth stage
• Improves product quality and styling• Add new product features and models• Enter new market segment• Enter new distribution channel• Product preference advertising
Maturity• Strong growth in sales diminishes. To defend
market share while maximizing profits .• Product may be enhanced to differentiate the
product from that of competitors• Pricing may be lower because of new competition• Distribution is more intensive and incentives may
be offered to encourage preference over competing products
• Promotion emphasis product differentiation
Marketing strategy : maturity stage
• Market modification – Expand number of brand users– Increase the usage rate per user
Marketing strategy : maturity stage
• Product modification–Quality improvement–Feature improvement–Style improvement
Marketing strategy : maturity stage
• Marketing program modification–Price–Distribution–Advertising– Sales promotion–Personal selling – services
Decline
• Maintain the product• Harvest the product• Discontinue the product
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