Marketing Chapter 10 Product Life Cycle

product life cycle
stages a new product goes through in the marketplace; introduction, growth, maturity, and decline
levels that PLC applies to
-product category
-single product (ex. Amazon Kindle)
brand (ex. Compaq)
introduction stage
slow sales and minimal profit; few competitors; marketing objectives are awareness and trial and primary demand
4 P’s of Introduction
-basic versions
-skimming strategy for high prices; penetration for low prices to reduce uncertainties and attract more customers
-distribution is reluctant channel intermediaries

ex. coconut water, smart watch, drones

growth stage
rapid increase in sales and profits, more competition, selective/secondary demand, improved versions of products
primary demand
the desire for a product class rather than for a specific brand ex. coconut water
secondary demand
ex. VitaCoco
4 P’s in growth stage
-prices remain or fall slightly
-need to gain as much distribution as possible

ex. tablets, e-book readers

maturity stage
sales and profits are slowing, fierce competition, further product differentiation
marketing objectives in maturity stage
holding market share, maintaining brand loyalty, controlling overall marketing cost. finding new buyers

ex. soft drinks, laptops

decline stage
sales and profits drop, driven by environmental changes like new technologies

ex. alarm clocks, radios

length of PLC
no exact time; influenced by mass communication and technological changes

ex. fax machine vs. email

fad product
immediately popular, but quickly loses popularity (ex. Silly Bandz)
innovators
venturesome, higher educated
early majority
deliberate; many informal social contacts
laggards
fear of debt; neighbors and friends are sources
early adopters
leaders in social setting; slightly above average education
late majority
skeptical; below average social status
3 ways to manage PLC
-modifying the product
-modifying the market
-repositioning the product
modifying the product
altering the product’s characteristics (ex. quality, performance) and adding new features
modifying the market
finding new customers; ex. Harley Davidson and women

increasing a product’s use; ex. Campbell soup in the winter

creating new use situations; ex. Glad Press’n Seal

factors triggering need for repositioning
reacting to a competitors’ position; ex. New Balance- comfort and fit
reaching a new market
ex. Old Spice is an old brand, but is marketed to younger men
reason for repositioning
catching a rising trend; ex. healthy cereals