principle of Marketing Lecture...-26.ppt

Principle of marketing

1. Principles of Marketing
Lecture-26

2. Summary
of
Lecture-21

3. Idea
Generation
Idea
Screening
Concept
Development
and Testing
Marketing
Strategy
Business
Analysis
Product
Development
Test
Marketing
Commercializa
tion
New Product Development

4. Today’s Topics
Product Life Cycle (PLC)

5. Time
Product
Development
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits ($)
Sales and Profits Over
the Product’s Life
From
Inception to Demise
Product Life-Cycle
(PLC)

6. The Typical Product Life Cycle (PLC) Has Five Stages
–Product Development, Introduction, Growth, Maturity, Decline
–Not all products follow this cycle

7. The four basic stages through which a successful product
progresses-introduction, growth, maturity, and decline.
Some products move rapidly through the product life cycle, while
others pass through those stages over long time periods.

8. Product Life-Cycle Strategies

9. Time
Product
Development
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits ($)
Sales and Profits
Over
the Product’s Life
From
Inception to Demise
Product Development Stage

10. Product
development
Introduction
Growth
Maturity
Decline
Begins when the company
develops a new-product
idea
Sales are zero
Investment costs are high
Profits are negative
PLC Stages

11. Introduction Stage

12. Time
Product
Development
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits ($)
Sales and Profits Over
the Product’s Life
From
Inception to Demise

13. Product development
Introduction
Growth
Maturity
Decline
Low sales
High cost per customer
acquired
Negative profits
Innovators are targeted
Little competition
PLC Stages

14. Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising
Build product awareness among early
adopters and dealers

15. Growth Stage

16. Time
Product
Development
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits ($)
Sales and Profits
Over
the Product’s Life
From
Inception to Demise

17. Product development
Introduction
Growth
Maturity
Decline
Rapidly rising sales
Average cost per
customer
Rising profits
Early adopters are
targeted
Growing competition
PLC Stages

18. Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,
warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising
Build awareness and interest in the
mass market

19. Time
Product
Development
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits ($)
Sales and Profits
Over
the Product’s Life
From
Inception to Demise
Maturity Stage

20. Product development
Introduction
Growth
Maturity
Decline
Sales peak
Low cost per customer
High profits
Middle majority are
targeted
Competition begins to
decline
PLC Stages

21. Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defending
market share
Diversify brand and models
Price to match or best competitors
Distribution
Build more intensive distribution
Advertising
Stress brand differences and benefits

22. Decline Stage

23. Time
Product
Development
Stage
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits ($)
Sales and Profits Over
the Product’s Life From
Inception to Demise

24. Product development
Introduction
Growth
Maturity
Decline
Declining sales
Low cost per
customer
Declining profits
Laggards are targeted
Declining competition
PLC Stages

25. Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk the brand
Phase out weak items
Cut price
Distribution
Go selective: phase out unprofitable outlets
Advertising Reduce to level needed to retain
hard-core loyal customers

26. Overlap of Life Cycle for Products A and B

27. WINDOWS 95
1991 1995 1996 1997
WINDOWS 3.1

28. Extending the Product Life Cycle

29. 1.Increase frequency of use by
present customers
2.Add new users
3.Find new uses
4.Change product quality or
packaging
Market Modification
Product Modification

30. To prevent the product going into decline you modify
the product
Adding new features, variations, model varieties will
change the consumer reaction -create more
demand therefore you attract more users

31. Enough for today. . .