Scribd Logo
Upload

Welcome to Scribd!

  • 15 views

    Ch-12 Addressing Competition and Driving Growth: Product Life Cycle

    Uploaded by

    Aditya Kumar
    1. Products go through distinct life cycle stages with changing challenges - introduction, growth, maturity, and decline. Strategies must adapt accordingly. 2. In introduction, sales are low as acceptance grows. Firms focus on awareness campaigns. In growth, sales and profits rise rapidly as more adopt. Firms improve products and distribution. 3. Maturity sees slowing growth as most potential buyers are reached. Firms pursue niches or modify products, marketing, or markets to renew growth. In decline, strategies focus on withdrawing or harvesting through cost cuts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Ch-12 Addressing Competition and Driving Growth: Product Life Cycle

    Uploaded by

    Aditya Kumar
    15 views20 pages
    1. Products go through distinct life cycle stages with changing challenges - introduction, growth, maturity, and decline. Strategies must adapt accordingly. 2. In introduction, sales are low as acceptance grows. Firms focus on awareness campaigns. In growth, sales and profits rise rapidly as more adopt. Firms improve products and distribution. 3. Maturity sees slowing growth as most potential buyers are reached. Firms pursue niches or modify products, marketing, or markets to renew growth. In decline, strategies focus on withdrawing or harvesting through cost cuts.

    Original Title

    MM CH 12(1).pptx

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. Products go through distinct life cycle stages with changing challenges - introduction, growth, maturity, and decline. Strategies must adapt accordingly. 2. In introduction, sales are low as acceptance grows. Firms focus on awareness campaigns. In growth, sales and profits rise rapidly as more adopt. Firms improve products and distribution. 3. Maturity sees slowing growth as most potential buyers are reached. Firms pursue niches or modify products, marketing, or markets to renew growth. In decline, strategies focus on withdrawing or harvesting through cost cuts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    15 views20 pages

    Ch-12 Addressing Competition and Driving Growth: Product Life Cycle

    Uploaded by

    Aditya Kumar
    1. Products go through distinct life cycle stages with changing challenges - introduction, growth, maturity, and decline. Strategies must adapt accordingly. 2. In introduction, sales are low as acceptance grows. Firms focus on awareness campaigns. In growth, sales and profits rise rapidly as more adopt. Firms improve products and distribution. 3. Maturity sees slowing growth as most potential buyers are reached. Firms pursue niches or modify products, marketing, or markets to renew growth. In decline, strategies focus on withdrawing or harvesting through cost cuts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 20

    Ch- 12 Addressing Competition and Driving Growth

    Product Life Cycle-

    A company’s positioning and differentiation strategy


    must change as its product, market and competition
    change over the Product Life Cycle (PLC).
    Product has a PLC asserts:

    1. Products have a limited life.

    2. Product sales pass through distinct stages


    with different challenges and opportunities.

    3. Profits rise and fall at different stages.

    4. Products require different strategies


    regarding marketing, finance, manufacturing
    and HR.
    Product Life Cycles
    1. Introduction- Slow sales growth. Profits
    nonexistent.

    2. Growth- Rapid market acceptance and profit


    improvement.

    3. Maturity- Slowdown in sales growth as


    achieved acceptance by most potential buyers.
    Profits stabilize or decline.

    4. Decline- Sales show downward drift and


    profits erode.
    Alternate Patterns:
    A) Growth Slump Maturity pattern-
    Sales grow rapidly when introduced and then
    fall to a sustained level by late adopter’s first
    buy and early adopter’s replacement. Eg- Small
    kitchen appliances – toaster ovens.

    B) Cycle-Recycle Pattern-
    Sales of new drugs with aggressive promotions.

    C) Scalloped pattern- Succession of life cycles


    based on new product uses or users. Eg- Nylon-
    parachutes, shirts, boat sails.
    Style, Fashion and Fad
    Lifecycles
    Style: Basic and distinctive mode of expression.
    (Clothing- Formal, Casual, Sporty). Last for
    generations and go in and out of vogue.

    Fashion: Currently accepted or popular style.


    Length of cycle is hard to predict. Ends because
    of compromise or too many adopt it.

    Fad: Fashions that come quickly into public


    view, adopted, peak early and decline very fast.
    1. Marketing Strategies: Introduction Stage

    Salesis low in introduction as it takes time to roll out


    product, work out problems, gain acceptance.

    Profits could be negative as high promotional


    expenditure to inform customers, induce trial and secure
    distribution.
    Pioneering Advantages- (Coca Cola, Amazon)

    Early users will recall the brand name.

    Itestablishes the attributes a product class should


    possess.

    Captures more users as it targets the middle of the


    market.

    Customer Inertia.

    Economies of scale, technological leadership,


    patents.
    Pioneering Drawbacks- (Apple Newton,
    Netscape browser)

    Second mover advantage.

    New products could be improperly positioned.

    Appeared before strong demand was there.

    Lack of resources.

    Complacency.
    2. Marketing Strategies: Growth Stage

    Rapid increase in sales and profits rise.

    Additional consumers start buying it.

    Prices stabilize or fall depending on demand.

    Maintainmarketing expenditure to educate market and to


    meet competition.
    To sustain market share growth, firms should:

    Improve product quality, add features.

    Add new models.

    Enter new segments.

    Increase distribution coverage.

    Shiftfrom awareness and trial communication to


    preference and loyalty communication.

    Lower prices for next layer of price sensitive buyers.


    3. Marketing Strategies: Maturity Stage

    Rate of sales growth slows and this stage lasts longer and
    is in 3 phases-

    No new distribution channels, new competitive forces


    emerge.

    Most potential customers have tried product and future


    sales now depend on population growth and replacement
    demand.

    Customers begin switching to other products.


    A few giants dominate and profit through
    high volume and low costs.

    Company can pursue niche strategy, profit


    through low volume and high margins.

    Three ways to change the course for a


    brand:
    Market Modification
    Product Modification

    Quality Improvement- Functional performance.

    Feature Improvement- Expand performance, safety,


    convenience.

    Style Improvement- Increase Aesthetic appeal.


    Marketing Program Modification

    Modify
    non-product elements- Price, Distribution and
    Communication in particular.

    Assesslikely success of changes in terms of effects on


    new and existing customers.
    4. Marketing Strategies: Decline Stage

    Technologicaladvances, shift in consumer tastes,


    increased competition.

    Firms might withdraw, reduce number of products, cut


    marketing budgets and reduce prices.
    Eliminate weak products- (GM Oldsmobile
    and Pontiac lines).

    Identify
    those products, appoint a committee,
    and make a recommendation.

    Harvesting- Gradually reduce costs while


    trying to maintain sales. Cut R&D, investment
    in equipment, product quality, sales force, ad
    expenditure.

    Divesting- Sell it to other firms. If not, liquidate


    the brand quickly or slowly.

    You might also like