Product Life Cycle
Marketing Management D01
April 7, 2013
Abstract
In marketing, there is a tool that is very useful to marketing strategy development. This tool is known as the product life cycle. The product life cycle goes through four stages before it is complete or starts over again. The life cycle starts with the introduction of a product, and then the product begins to grow as it is recognized by more markets and is delivered to through more channels. After the growth period, a product reaches maturity where there has competitors and sales do not match up with profit. This is the time where marketing strategists reevaluate and try to remarket the product. The last stage is the decline. This is where the seller decides to cut
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This is often the stage where a firm has to remarket the product or brand in order to keep it alive and keep profits relative to sales. Eventually, there is a decline in the sales (Peter & Donnelly). When the product enters into the stage of decline some big decisions must be made in order to keep profits relative to sales. According to the text there are five questions that the seller must decide. “The seller must decide to (1) drop the product, (2) alter the product, (3) seek new uses for the product, (4) seek new markets, or (5) continue with more of the same” (Peter & Donnelly). It is important to decide these things in order to keep the firm profitable. The costs need to be cut while still maintaining quality to ensure brand loyalty. Then the product should be evaluated to find a way to market it in yet another way and renew its life. During decline, the price of the product is incredibly low to sell of remaining merchandise or it might be high to sell to a certain kind of market called a niche. The channels are once again limited and promotion is minimal to cut spending. Decline is the end of the product life cycle. The product life cycle is primarily useful in that it forces management to have long term views about a marketing planning. When looking at the stages of the life cycle it ensures that the different aspects of marketing are
For instance, in the Low End market, other groups refrained from updating products each year, once this was identified we too, stopped advancing our products to save money. Since the entire market held their products constant sales did not decline.
In the product life cycle, All-round is found within the maturity stage. Here, sales increase at first but at a slower rate as the market introduces its competitors and increases competition. Sales and profit tend to decline towards the end of the maturity stage. In one strategy, it is important to maintain customer loyalty and satisfaction in order to maintain profitability within this stage. For example, promotional allowances and sales force relationships are essential in having this accomplished. Another strategy is reformulation of the product. All-round has not been reformulated but improvements on a routine basis to the product can help increase market growth.
This stage might be the most unpopular with companies. Sales decline and companies usually don’t spend as much on marketing for products on the decline. Companies usually make decisions to halt production, cut marketing programs and reintroduce the products. Sometimes this works, for example, Lacoste which rebounded and reinvented itself and sometimes it doesn’t, as with Circuit City.
A life cycle diagram helps businesses analysis their attempt to identify a set of commercial stages in the life of commercial products, for example, introduction, promotion, growth maturity and decline.
The product life cycle is known as the procedure where a product is introduced to the market, expands in popularity,
The impact of product life cycle on marketing is that corporations must always plan products and offerings according to the life cycle. Especially in the durable goods market like motorcycles it is imperative than a manufacturer know the product life cycle in order to maintain market share or grow. In order to maximize life cycle revenues the company must maximize revenues and profits from all sources including warranties, spare parts, and accessories. Service is an integral part of a long product life cycle.
Product usage and lifecycle: product usage is high and product life cycle comes in four sections.
Even with this effort, the industry is still declining in manufacturing and profitability. On the other hand,
The product life cycle concept derives from the phases through which a product undergoes, from its introduction, to its growth in the market, to the maturity it attains in that market, to the very last stage of declination. The
Economic: The industry’s performance is highly tied in with the economy. A weak economy will mean weak sales.
Product life cycle refers to the stages that a product. Changes in demand for the product is the factor that delineates the changes from one cycle to another (Daft & Sanders, 2012). The typical product life cycle has four identifiable stages;
However, marketers should not become complacent and they may seek to inject new life into the brand to prolong the growth stage and put off the onset of maturity. A mature product may need a facelift, and marketers must decide whether to support a declining brand or let it die a natural death.
Hats are a product that have become deeply incorporated in the American culture and lifestyle. In the United States, hats are nearly always present in everyday life, from sports events (i.e. baseball games) to the streets of New York where one might see people wearing hats as a fashion accessory in their everyday life. Today, there are a plethora of different styles and varieties of hats. For example, one can buy university hats, sports teams hats and even superhero hats, thus causing the hat industry grow everyday. In this paper, I will analyze the hat industry life cycle, specifically focusing on the “New Era” company, one of the most popular hat companies in the United States and worldwide.
It is believed that the decline began when the market became more competitive and consumers began to demand lower costs and quicker delivery. Since this had not previously been an issue, the company had a difficult time adjusting (Beer & Tushman, 2013).
Competition: As time goes on firms drop out until no one is producing the product.