Product Life Cycle &
Marketing Strategy
Hitesh Gupta
26th Sep 13
PRODUCT LIFE CYCLE CURVE
GROWTH (E.G. SALES, VOLUMES)
LAUNCH
DEVELOPMENT
INTRODUCTION GROWTH MATURITY DECLINE TIME
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PRODUCT LIFE CYCLE CURVE
GROWTH (E.G. SALES, VOLUMES)
LAUNCH
DEVELOPMENT
INTRODUCTION GROWTH MATURITY DECLINE TIME
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PRODUCT LIFE CYCLE CURVE
GROWTH (E.G. SALES, VOLUMES)
LAUNCH
DEVELOPMENT
TIME
Identifying
Features INTRODUCTION GROWTH MATURITY DECLINE
Sales Low High High Low
Investment
Very High High Low Low
Cost
Competition Low or no competition High Very High Low
Advertising Very High High High Low
Profit Low High High Low
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PRODUCT LIFE CYCLE CURVE
GROWTH (E.G. SALES, VOLUMES)
LAUNCH
DEVELOPMENT
TIME
INTRODUCTION GROWTH MATURITY DECLINE
Augment and Phase out weak
Refine the
Educate the market and differentiate the models, reduce
Focus product and build
build brand identity product and build costs, and milk
brand preference
brand reputation the brand
Marketing
Latent Emerging Fragmented Eroding
segmentation
Competition Limited Growing Fierce Fading
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PRODUCT LIFE CYCLE CURVE
GROWTH (E.G. SALES, VOLUMES)
LAUNCH
DEVELOPMENT
TIME
STRESS MAINTAIN HARVESTIN
Marketing
objective GAIN AWARENESS DIFFERENTI BRAND G,
ATION LOYALTY DELETION
Competition Few More Many Reduced
Product One More versions Full product line Best sellers
Gain market Defend market
Price Skimming or penetration Stay profitable
share, deal share, profit
Stress
Reminder Minimal
Promotion Inform, educate competitive
oriented promotion
differences
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PRODUCT LIFE CYCLE CURVE
MATURITY
1. costs are lowered as a
result of production
GROWTH volumes increasing and
experience curve effects
2. sales volume peaks and
1. costs reduced due to market saturation is
economies of scale reached
2. sales volume
increases significantly
3. increase in competitors
entering the market
DECLINE
3. profitability begins to 4. prices tend to drop due to 1. costs become counter-
rise the proliferation of
INTRODUCTION 4. public awareness
increases
competing products
5. brand differentiation and
optimal
2. sales volume decline
3. prices, profitability diminish
1. costs are very high 5. competition begins to feature diversification is 4. profit becomes more a
GROWTH (E.G. SALES, VOLUMES)
2. slow sales volumes to start increase with a few emphasized to maintain or challenge of
3. little or no competition new players in increase market share production/distribution
4. demand has to be created establishing market 6. Industrial profits go down efficiency than increased
5. customers have to be prompted 6. increased competition
sales
to try the product leads to price
6. makes no money at this stage decreases
LAUNCH
DEVELOPMENT
TIME
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Product Life-Cycle
Strategies
PLC Stages
Begins when the
Product development
company develops
Introduction
a new-product idea
Growth
Sales are zero
Maturity
Decline Investment costs
are high
Profits are negative
Product Life-Cycle
Strategies
Slow sales growth cell
PLC Stages phones 15 yrs back,
Hybrid cars today, Blu-
Ray technology, HD TV
Product development Intensive promotions,
Introduction communications
Growth Price uncertainty
Maturity Uncertain competition
reactions
Decline
Uncertain consumer
responses
Non-existent profits
Negative cash flow
Product Life-Cycle
Strategies
PLC Stages Rapid sales growth
cell phones today,
Product development internet, LCD TV
Introduction Market acceptance
Growth Price stabilization
Maturity Features stabilization
Decline Profits start coming in
Brand building starts
Competition starts
building
Product Life-Cycle
Strategies
Slow sales growth Land
PLC Stages lines, 100cc motorbikes,
fountain pens
Price reductions,
Product development promotions
Introduction Features changes /
Growth reductions / new
Profits go down
Maturity
Competitors introduce
Decline new products
Brand sustainability is
imperative in
communication
Product Life-Cycle
Strategies
PLC Stages Decline in sales
audio & video
Product development cassette players,
Introduction pagers
Growth New products meet
Maturity satisfaction
Decline Profits erode
Communication
expenses are stopped
Marketing Strategies in the PLC
Introduction Growth Maturity Decline
Marketing Create product Gain market Defend Reduce
objectives awareness & share, market expenses
trials create strong share, create milk
positions profits brands
Product Offer basic Offer product Diversify Phase out
strategy Products extensions, brands, weak
Eg. Vodafone build items & products
service models
differentiation Eg.
Blackberry
Price Charge cost Penetration Match pricing Cut prices
Plus price to
promotions, strong
deals competitors
Eg Dominos in
India
Advertising Chosen Segment Advertise Reduce
& market awareness differentiation levels to
Communicat segments are retain
ions addressed loyalists
Core Product
This is the basic product and the
focus is on the purpose for which the
product is intended. For example, a
warm coat will protect you from the
cold and the rain.
Generic Product
This represents all the qualities of the
product. For a warm coat this is
about fit, material, rain repellent
ability, high-quality fasteners, etc.
Expected Product
This is about all aspects the
consumer expects to get when they
purchase a product.
That coat should be really warm and
protect from the weather and the
wind and be comfortable when riding
a bicycle.
Augmented Product
This refers to all additional factors which
sets the product apart from that of the
competition.
And this particularly involves brand identity
and image.
Is that warm coat in style, its colour trendy
and made by a well-known fashion brand?
But also factors like service, warranty and
good value for money play a major role in
this.
Potential Product
This is about augmentations and
transformations that the product may
undergo in the future. For example, a
warm coat that is made of a fabric
that is as thin as paper and therefore
light as a feather that allows rain to
automatically slide down.
