- Are you a business owner struggling to meet your goal?
Declining profit margins ruining your performance review? - The right product or service at the right price where it's needed when it's needed at a fair profit to the company and fair price to the consumer.
- When we buy a product we need to know how long it will last. Perishable goods, like fruit and vegetables, have a short lifespan. Durables like a car have a longer lifespan. Different products last for different lengths of time but their life-cycles have elements in common and follow PLC curve:
- The variables ( the 4 P's of marketing: Product, Price, Place, and Promotion) are known as the Marketing Mix that major marketing managers can control and make decisions to increase market share and inhance the ROI in order to best satisfy customer needs in the target market. For more information about Marketing Mix visit: http://www.quickmba.com/marketing/mix/
- Your product is somewhere on both of these graphs. Where the line is located between Product Life Cycle graph and Commodity Slide is critical to your business success.
- Developing a complete product life cycle management process is important for improving your internal development process.
- Business success and profitability are tied directly to product management and where your product is on the Product Life Cycle Graph? For more information about Product Life Cycle visit: http://www.quickmba.com/marketing/product/lifecycle/
- Product Life Cycle. To be able to market its product properly, a firm must be aware of the product life cycle of its product. The standard product life cycle tends to have five or six phases: 1.Development 2.Introduction 3.Growth 4.Maturity 5.Decline It can also be shown graphically. The graph often has two lines - one to show the time and level of profit, and one to show the level of sales and profits. For more information about PLC visit: http://bized.ac.uk/virtual/cb/factory/marketing/theories4.htm
- It is important to know where your product is in its life cycle, as different stages require different strategies. Just as a product has its own life cycle, it also has an almost opposite curve called the commodity slide. In the introduction stage of the commodity slide, volume is low and revenue per unit sold is very high. As progress on the learning curve is made, costs are reduced, making the product more affordable to more customers and increasing volume. The increasing volume that develops in the early stages of the commodity slide also draws additional competitors. Businesses strive to increase market share to achieve enough volume to justify more automated processes. As volume increases and revenue per unit decreases, the product moves from specialized solution to commodity status. http://www.cannonadvantage.com/product_mkt_mgmt.html
- Products Life Cycle: the product life cycle -the typical path of products through four stages, from introduction (initial appearance) to eventual deletion through growth and maturity -is depicted in figure1. Each of the four stages of the product cycle is discussed in the following link. The objectives of the firm in the early stages of the product life cycle is to stimulate demand for the new market entry.
- Introduction : The product is tested and developed before it is launched. Initial sales will be low until the consumer starts buying. At this point, production costs are much higher than the revenue from sales. Growth : As sales increase production becomes more profitable. The early development costs can be recovered. The success of the product can lead to brand loyalty and repeat sales. Maturity : The product reaches its peak of sale and is at its most profitable point for the company. Competitors have now entered the market, which may reach saturation point. Decline : As new models and designs come out, or fashions change, a product may become obsolete. Sales fall, as does revenue. It is no longer profitable to produce it.
- Applying the product life cycle to the marketing mix. Marketing teams watch for changes in the business environment and react to them. They respond to consumer needs, the actions of competitors or government and use the following strategies during each stage of the product life cycle. Introduction : The new product is heavily promoted to make the target market aware of it. A special introductory price may help push the product. Growth : As sales and profitability increase, the selling price may be reduced to make the product more attractive. Continued advertising around the brand name will help to sustain sales. The marketing team may consider expanding its distribution, to reach more consumers. Maturity : Competitors will usually have entered the market at this stage. If their products are as good but cheaper the company may lose some of its market share. The pricing strategy must be reviewed. Marketers may also add value to their product, by offering accessories or insurance, for example. Decline : Marketing cannot save a product at this stage, but targeting a different and smaller segment can prolong its life.
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