Product life cycle & marketing strategy

1. Product Life Cycle & Marketing Strategy Hitesh Gupta 26 th Sep ‘13

2. Product is anything which is of value & is offered thro’ voluntary exchange A change in feature creates a new product Service : Set of activities, benefits or satisfaction offered for sale » Intangible » May not result in ownership What is a product?

3. Goods and/or Services Are the Product

4. What is the demand for these products in 2013 compared to 1990? » Fixed phone, land-line » Cell phones » Umbrella » Video cassette player » Diabetes Insulin injections Demand for products ???

5. New products meet needs better » Maruti 800 v/s Premier Padmini • Technology changes » Video conference v/s air travel • Substitutes replace a product » Telegrams v/s SMS, SMS v/s Mobile Chat • Population moves to the next level in Maslow’s NH » Basic variant of a car to full loaded model Why would demand change?

6. PLC Concept is Based on Four Premises Products have a limited life. Product sales pass through distinct stages, each with different marketing implications . Profits from a product vary at different stages in the life cycle. Products require different strategies at different life cycle stages.

7. Product Life-Cycle Strategies 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

8. Product Life-Cycle Strategies Product development Introduction Growth Maturity Decline Slow sales growth – cell phones 15 yrs back, Hybrid cars today, Blu -Ray technology, HD TV Intensive promotions, communications Price uncertainty Uncertain competition reactions Uncertain consumer responses Non-existent profits Negative cash flow PLC Stages

9. Product Life-Cycle Strategies Product development Introduction Growth Maturity Decline Rapid sales growth – cell phones today, internet, LCD TV Market acceptance Price stabilization Features stabilization Profits start coming in Brand building starts Competition starts building PLC Stages

10. Product Life-Cycle Strategies Product development Introduction Growth Maturity Decline Slow sales growth – Land lines, 100cc motorbikes, fountain pens Price reductions, promotions Features changes / reductions / new Profits go down Competitors introduce new products Brand sustainability is imperative in communication PLC Stages

11. Product Life-Cycle Strategies Product development Introduction Growth Maturity Decline Decline in sales – audio & video cassette players, pagers New products meet satisfaction Profits erode Communication expenses are stopped PLC Stages

12. Varies with every product » Can be controlled by marketing efforts • Changes with technology introductions » Inventions » Disruptive innovations PLC Duration

13. Innovators – » “first on the block” buyers » Typically younger in age » They enjoy taking risks with new products » They are mostly well informed » Very small in numbers » Tolerate failures » They trigger the next level - Adopters Early adopters – » These wait for initial purchases to happen, product reviews » They enjoy novelty, higher incomes youth, educated, socially forward » Opinion leaders » They help spread the world PLC and the Customer adoption process

14. Majority - » Skepticism , senior in age, mixed levels of education » They build the sales volumes » Don’t like to take too much risk » Competitors enter the market when these come in » Careful buyers & choosers Laggards - » They avoid change » Rely on existing products until it outgrows completely » Form the last small section » They don’t need to much ad & communication

15. PLC Length and Shape Sales Sales Sales Time Time Time Style Fashion Fad

16. Introduction Growth Maturity Decline Marketing objectives Create product awareness & trials Gain market share, create strong positions Defend market share, create profits Reduce expenses milk brands Product strategy Offer basic Products Eg . Vodafone Offer product extensions, build service differentiation Diversify brands, items & models Eg . Blackberry Phase out weak products Price Charge cost Plus Penetration price promotions, deals Eg Dominos in India Match pricing to strong competitors Cut prices Advertising & Communications Chosen market segments are addressed Segment awareness Advertise differentiation Reduce levels to retain loyalists Place Build Selective Distribution Eg . Hushpuppies Build intensive distribution Build more intensive distribution Go Selective: Phase out unprofitable outlets Marketing Strategies in the PLC

17. At the heart of a great brand is a great product Thank you