Product Life Cycle Stages Introduction

4 Product Life Cycle Stages Introduction Aim to: • establish a clear brand identity • connect with the right partners to promote your product • set up consumer tests, or provide samples or trials to key target markets 5 Product Introduction Strategies 1. Rapid Skimming Launching the product at a high price and high promotional level to face competition and establish market share quickly. Product Introduction Strategies Rapid Skimming Examples Product Introduction Strategies 2. Product Introduction Strategies Slow Skimming - Examples Product Introduction Strategies 3.

Product Life C
Presented By Rea Marinell S

 It is the process a commercial product goes
through from when it is first introduced into the
market until it declines or is removed from the
market.
 The life cycle has four stages - introduction,
growth, maturity and decline.
 Every product has a life cycle and time spent at
each stage differs from product to product.

4
Introduction
Product Life Cycle Stages
In this stage, the product is being released
into the market. During the introduction
stage, marketing and promotion are at a high
and the company often invests the most in
promoting the product and getting it into the
hands of consumers hoping to later cash in on
its growing popularity.

5
Introduction
Product Life Cycle Stages
Aim to:
• establish a clear brand identity
• connect with the right partners to promote
your product
• set up consumer tests, or provide samples
or trials to key target markets

Conditions:
• In case large numbers of consumers or
markets are not aware about the
product.
• Customers are ready and willing to pay
for a high price allocated to such
products.
• The level of competition is high and
therefore a firm is struggling to build
brand image and preferences.
 Launching the
product at a high
price and high
promotional level to
face competition
and establish market
share quickly.
Product Introduction Stra
1. Rapid Skimming

Product Introduction Stra
Rapid Skimming
Examples

Conditions:
 A market is aware about the firm and
products that there is no need to promote
much.
 Buyers are ready and willing to pay for a
high price of firm products.
 When the market is limited in size this
strategy can operate effectively.
 If there is no likely competition in a near
future.
 Launching the
product at a high
price and low
promotional level;
Done when no
serious competition
is expected.
Product Introduction Stra
2. Slow Skimming

Product Introduction Stra
Slow Skimming - Examples

Conditions:
 The market size must be large.
 The market is not aware about the product
introduced within the market.
 The buyers must be price sensitive, that they
are attracted with price changes even if it is
very little.
 The level of competition must be very stiff or
cut throat competition.
 The firm production costs fall within the firm
production scale.
 launching the
product at a low
price with significant
promotion.
 The aim of this
strategy is to
smooth a road to
penetrate in the
market.
Product Introduction Stra
3. Rapid Penetration

Product Introduction Stra
Rapid Penetration - Example

Conditions:
• The market must be highly sensitive to
price but not to promotion.
• The market must be large.
• The competition must exist at low level.
Examples:
FCMG products – toilet paper, gums, over-the-
counter drugs like aspirin; cleaning and laundry
products; plastic goods;
 The aim is to attract
customers and to
make abnormal
profits through low
price which has been
sat to the products
and the promotion is
maintained at low
level in order to
reduce the operation
cost.
Product Introduction Stra
4. Slow Penetration

15
Growth
Product Life Cycle Stages
In this stage, consumers are already taking to
the product and increasingly buying it. Other
companies become aware of the product and
its space in the market, which is beginning to
draw attention and increasingly pull in
revenue.

Product Growth Strateg
1. Market Penetration
 It's an attempt to increase market share
using your current products or services.
 Carry out this strategy by lowering the
price of a product or service to attract next
layer of price sensitive buyers, or by
increasing marketing efforts to lure
customers away from competitors.

Product Growth Strateg
Market Penetration-Example

Product Growth Strateg
2. Product Development
 Product development means creating new products to serve
the same market.
 It also involves improving product quality, adding new
product features or support services to grow your market
share such as adding new models and products of different
sizes, color, shapes flavors etc.
Example:
Packing wheat flour in retail bags for household consumption.
Converting land line phones into wireless handsets for easy portability
and full-time access to communication.

Product Growth Strateg
3. Market Expansion
 Market development involves introducing your products
or services to new markets. You may want to enter a new
city, state or even country. Or you can target a market
segment.
 Companies should also increase distribution coverage and
enter new distribution channels like selling products
online across multiple platforms.
 Organizations should consider franchising opportunities.

Product Growth Strateg
4. Diversification
 It involves creating a totally new product for a
completely new market. This is the riskiest
growth strategy because it's the most
uncertain. Failure is a distinct possibility,
although the potential of a high payoff may be
worth the risk for companies with sufficient
financial means.

Product Growth Strateg
4. Diversification
HORIZONTAL DIVERSIFICATION
 This involves the purchase or
development of new products by
the company, with the aim of
selling them to existing customer
groups. These new products are
often technologically or
commercially unrelated to
current products but that may
appeal to current customers.
EXAMPLES:
Disney Company –
From Cartoons to
Cruises, Theme Parks
and Media.
Apple – From
Computers
(Macintosh series
from 1976 onwards)
iMac and ibook;
ipod, iphone

Product Growth Strateg
4. Diversification
VERTICAL DIVERSIFICATION
 The company enters the
sector of its suppliers or of
its customers.
EXAMPLE
 A company that does reconstruction of
houses and offices and you start selling
paints and other construction
materials for use in this business.

Product Growth Strateg
4. Diversification
CONCENTRIC DIVERSIFICATION
 It involves the development of a
new line of products or services
with technical and/or commercial
similarities to an existing range of
products. This type of
diversification is often used by
small producers of consumer
goods, e.g. a bakery starts
producing pastries or dough
products.
CONGLOMERATE DIVERSIFICATION
 Is moving to new products or
services that have no technological
or commercial relation with current
products, equipment, distribution
channels, but which may appeal to
new groups of customers.
Example:
A computer company decides to produce
notebooks

25
Maturity
Product Life Cycle Stages
In this stage, its sales tend to slow or even
stop - signaling a largely saturated market. At
this point, sales can even start to drop. Pricing
at this stage can tend to get competitive,
signaling margin shrinking as prices begin
falling due to the weight of outside pressures
like competition or lower demand.

Product Maturity Strate
1. Market Modification
 This strategy is aimed at increasing sales by
raising the number of brand users and the
usage rate per user. Sales volume is the
product (or outcome) of number of users and
usage rate per users.

Product Maturity Strate
1. Market Modification
i. Convert non-users into users by
convincing them regarding uses
of products
ii. Entering new market segment
iii. Winning competitors’
consumers
i. More frequent use of product
ii. More usage per occasion
iii. New and more varied uses of
product/ have consumers use
more of the product on each
occasion; have consumers use
the product in new ways.
Ways to Expand No. of Users: Ways to Expand Usage Rate:

Product Maturity Strate
2. Product Modification
 Product modification involves improving product qualities and modifying
product characteristics to attract new users and/or more usage rate per user.
a. Quality Improvement -Aims at increasing the product’s functional
performance. Quality improvement includes improving safety, efficiency, reliability,
durability, speed, taste, and other qualities. Quality improvement can offer more
satisfaction. Eg. Pillsbury; Naturefresh
b. Feature Improvement -aims at adding new features such as size, weight, color,
materials, additives and accessories that expand the product’s performance, versatility,
safety or convenience. Eg. Shampoos –always with additional features
c. Style Improvement – aims at increasing the products aesthetics appeal.
Eg. New car models; new coke

Product Maturity Strate
3. Adopting Advance Technology
4. To do Nothing
To do nothing can be an effective marketing strategy in the m
stage.New strategiesare not formulated.Company believesit is
advisable to do nothing.Earlier or later,the decline in the sales is
certain.Marketertries to conserve money,which can be lateron
invested in new profitable products. It continues only routine
and starts planning for new products.

31
Product Life Cycle Stages
In this stage, product sales drop significantly
and consumer behavior changes as there is
less demand for the product.
Reasons:
• technological advances
• shifts in consumer tastes
• increased competition can play a key role

32
Product Life Cycle Stages
Main Objective:
To reduce expenditure and “milk” the brand.
The first important task is to detect the poor
products as to reduce cost to the firms and
remove hidden costs like promotions,
management’s time, delays search for
replacements and creates a lopsided product
mix.

Product Decline Strateg
Continue with the Original Product:
o reduce your promotional expenditure on the products
o reduce the number of distribution outlets that sell them
o find another use for the product
o maintain the product and wait for competitors to withdraw from
the market first.

Product Decline Strateg
Continue Products with Improvements:
o Qualities and features are improved to accelerate sales.
o Products undergo minor changes to attract buyers.
Drop the Product:
o harvest the product or service before discontinuing it
o sell the brand to another business
o significantly reduce the price to get rid of all the inventory