8 product life cycle - utokyo opencourseware...marketing strategy in the maturation period -to take...

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Lecture Notes Vol. 8 for Management Strategy, 2006 8 Product Life Cycle 1 Stages of Product Life Cycle 1.1 Fundamental Pattern ◆Introductory Period -New product introduced, small sales/profit ◆Growth Period -Rapid growth in sales/profit ◆Maturation Period -Sales growth slacking off, coming to a halt ◆Decline Period -Sales/profit in decline

Sales

Unit Price

Profit

Loss

IntroductoryPeriod

Growth Period Maturation Period Decline Period

Product Life Cycle

Time

￥

◆Typical Example of Life Cycle: VCR

Lecture Notes Vol. 8 for Management Strategy, 2006

2

図２．ＶＴＲの生産推移

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

千台

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

百万円

生産台数

輸出台数

国内出荷台数

海外生産台数

生産金額

Units produced Units exported Units of domestic shipment Units produced overseas Production money amount

Diagram 2 Transition of VCR Production

Milli

on Y

en

Qua

ntity

in T

hous

and

Drawn by Shintaku

1.2 Diffusion Curve of New Product ◆Diffusion Curve

S-Shaped Ogive

Bell-Shaped FrequencyDistribution Curve

Time

Per

cent

age

of N

o. o

f Ado

pter

s

‡

Rogers, E. M.(Author), Aoike, S. & Uno, Y. (Translator) Diffusion of Innovations, Sanno Univ. Publication, 1990. P350 Figure7-1.


3

◆Adopter of New Product

Innovators

Early adopters

Late majorityLaggards

Early majority

Diagram 7-2 Adopter Categories Based on Innovativeness

There is a continuity in the size of innovativeness that is measured based on whenone adopts an innovation. But, by delimiting by each standard deviation from themeanscore of the adoption time point, this continuum can be separated into the fivecategories.

‡

Origin: Rogers, E. M.(Author), Aoike, S. & Uno, Y. (Translator) Diffusion of Innovations, Sanno Univ. Publication, 1990. P356 Figure7-2.

携帯電話加入台数

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

92 93 94 95 96 97 98 99 2000 2001

千台

累積当該年

Subscription Quantity of Cellular Phones

Cumulative Relevant Year

Quan

tity

in T

housa

nd

Drawn by Shintaku

2 Product Life Cycle and Strategies 2.1 Issues in Each Stage of Life Cycle


4

◆Introductory Period -Expansion of the market ◆Growth Period -To secure the brand preference ◆Maturation Period -To secure own firm’s customers and deprive other firms of their customers ◆Decline Period - Withdrawal -Reenlargement of the market -Survivor’s profit

2.2 Strategies in Introductory Period ◆Strategic focus: Market expansion -To remove a bottle neck of the diffusion ◆Factors that prevent a new product’s diffusion -Customers Unaware of the product’s being per se Ignorant of the product information such as it application or function Holding off due to a high price -Producers Not grasping customer needs Production system not prepared Many defectives in initial-stage products Sales system not organized ◆4Ps in the introductory period -Product Easier understanding and easier use of the essential service -Promotion Push-type promotion with an emphasis on the explanation for providing product

information -Place (Distribution Channel) Closed-type; To set a high margin for distributors -Price Penetrating pricing policy Skimming pricing policy ● High side (to recover costs of manufacturing/marketing)

2.3 Strategies in Growth Period


5

◆Strategic focus -To secure a brand preference, and grow at a rate higher than that of the market ◆Marketing strategy in the growth period -Product To enrich supplementary services in addition to the essential service -Distribution channel From the closed-type to open-type; To reduce a distribution margin -Sales promotion From the push-type to pull-type leveraging mass media -Price Reduction in price to a popular level

2.4 Strategy in Maturation Period ◆Strategic focus: to secure own share

◆Marketing strategy in the maturation period -To take away other firms’ shares after establishing a brand loyalty to own product ◆Marketing mix (set sequence) in the maturation period

-Different by each competitive position -Leader, challenger, nicher, follower

2.5 Strategies in Decline Period ◆Strategic options in the decline period -Withdrawal

-Reenlargement of the market -Survivor’s profit ◆Pullout at a right timing -Pullout of “8mm camera” of Fuji Photo Film Co. ◆Look for an way to re-enlarge the whole market -Fairly epoch-making innovation is required for a reenlargement. -High-definition television set, Minolta’s α7000 ◆Find out a new application/market -Honda’s foray into Asian markets with its Super Cub -Electronic notebook; from old chaps to females and grade-schoolers ◆Gear towards a survivor’s profit -Lotte’s chewing gums -Nagaoka’s phonograph needles


6

2.6 Characteristics and Strategies Regarding Product Life Cycle by Stage

Introductory Period Growth Period Maturation Period Decline Period

Sales low level rapid rise slow rise or decent decent

Profit small or minus maximum level decent low level or zero

Customer innovator mass market mass market laggard

Competition scarce increase many competitors decrease

Strategic Focus maket expansion penetration in market defense of share timing of pullout

Marketing Expenditure high level high level (decent in ratio) decent low level

Strategic Emphasis product awareness brand preference brand loyalty selective

Distribution closed-type open-type

Price high level decent

Product essential service supplementary service

Promotion push pull with mass media

Insered with partial modification of the following sources: Kotler, P., Marketing Management , President Inc., p.240, and,Shimaguchi, Mitsuaki, and Ishii, Jyunzo (1987), Contemporary Marketing , Yuhikaku Publishing, p.154

Cha

ract

eris

tics

Stra

tegi

es

3 Variations of Product Life Cycle 3.1 Relationship with Substitutes ◆Self-Fulfilling Prophecy -If there had not been this prophecy nothing would have happened, but because of this, the reality

has changed. -When one takes it into one's head that certain product “has come to the decline period”, then this

product may in fact decline. -Pullout at too early a timing (?) ◆8mm Camera ⇒ Video camera -Early pullout and self-defeat of Elmo, Canon, Chinon, Fuji Photo Film -Existence of an air pocket period -Domestic shipment of 8mm cameras started declining around 1976. -Video camera’s emergence in ’79, and its market’s initial rise in ‘82 -As an 8mm camera was a durable consumer item, there was a chance that consumers held off purchasing them at an early stage foreseeing the emergence of video cameras.


7

撮影機器

0

2,000 ,000

4 ,000 ,000

6 ,000 ,000

8 ,000 ,000

10 ,000 ,000

12 ,000 ,000

14 ,000 ,000

70 72 74 76 78 80 82 84 86 88 90 92

台

ビデオカメラ

映画撮影機・映写機

Filming Devices

Video Camera

Moving Picture Camera/Movie Projector

Uni

t

◆Typewriter ⇒ Word Processor -Pullout at too late a timing; Sudden growth immediately before the decay -Emergence of the word processor for individual users and an enhancement in its

price/performance ratio

タイプライターの生産

0

500 ,000

1 ,0 00 ,0 00

1 ,5 00 ,0 00

2 ,0 00 ,0 00

2 ,5 00 ,0 00

3 ,0 00 ,0 00

3 ,5 00 ,0 00

4 ,0 00 ,0 00

4 ,5 00 ,0 00

5 ,0 00 ,0 00

70 72 74 76 78 80 82 84 86 88 90 92

台

タイプライター

ワープロ

Production of Typewriters

Typewriter

Word Processor

Uni

t

◆Camera: Cycle by Segment


8

日本におけるカメラの生産台数

0

2 ,0 0 0 ,0 0 0

4 ,0 0 0 ,0 0 0

6 ,0 0 0 ,0 0 0

8 ,0 0 0 ,0 0 0

1 0 ,0 0 0 ,0 0 0

1 2 ,0 0 0 ,0 0 0

1 4 ,0 0 0 ,0 0 0

1 6 ,0 0 0 ,0 0 0

1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2

フォーカルプレーンシャッター（一眼レフ）

レンズシャッター（コンパクト・カメラ）

一眼レフの輸出急減

ミノルタα7000

コンパクトカメラの高画質化

日本におけるカメラの生産台数

0

2 ,0 0 0 ,0 0 0

4 ,0 0 0 ,0 0 0

6 ,0 0 0 ,0 0 0

8 ,0 0 0 ,0 0 0

1 0 ,0 0 0 ,0 0 0

1 2 ,0 0 0 ,0 0 0

1 4 ,0 0 0 ,0 0 0

1 6 ,0 0 0 ,0 0 0

1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2

フォーカルプレーンシャッター（一眼レフ）

レンズシャッター（コンパクト・カメラ）

一眼レフの輸出急減

ミノルタα7000

コンパクトカメラの高画質化

Production Quantity of Cameras in Japan

Focal-plane shutter (single-lens reflex)Lens shutter (compact camera)

Steep decline in export ofsingle-lens reflex

Minolta α7000

High-quality picture by compactcamera

3.2 Anomalistic Cycle ◆Actual life cycle is not necessarily “beautiful”. -Anomalistic cycle is a composition of multiple life cycles. 3.2.1 Cycle-Compound Form

Sales

Diagram 3-2 Variation on Life-Cycle Pattern

Origin: Kotler, P., Marketing Management , President Inc., P.223

(b) Cycle-Compound Form Time

‡

◆Generational shift of semiconductor DRAMs


9

DRAMの生産量

0

100

200

300

400

500

600

700

80080

81

82

83

85

86

87

88

90

91

92

93

95

96

M. U

nits

16K 64K 256K 1Mb

4Mb 16Mb total

Production Quantity of DRAM

Origin: Drawn by Shintaku -Life cycle of the whole DRAM is a compound of the life cycle of each generation. -DRAM of two-to-three generations simultaneously exists side-by-side in the market. -Market segments are different ranging from servers to personal computers. ◆Generation shift of optical disc drives

光学ドライブ世界出荷台数推移

0

50000

100000

150000

200000

250000

91 92 93 94 95 96 97 98 99 2000 2001 2002 2003（暦年）

（千台）

CD-ROM

DVD-ROM

CD-R/RW

COMBO

書込可能DVD合計

資料：テクノ・システム・リサーチ　データより新宅作

Transition of World Shipment Quantity of Optical Disc Drives

Writable DVD

(Thousand Units)

Drawn by Shintaku based on the data by Techno System Research

Total


10

In view of the whole optical disc drives, the market is still on its way to enlargement (in Growth Period). But in terms of each product generation, initial CD-ROM drives have fallen off, and writable CD-R/RWs and next-generation DVDs are growing.

3.2.2 Cycle-Recycling Form

Sales

Time

First CycleSecond Cycle

(a) Cycle-Recycling Form

‡ Origin: Kotler, P., Marketing Management, President Inc., p.223 ◆Instant noodle -Pot noodle’s first boom and second boom -Relationship between supplement and substitute From a price segregation to a head-to-head competition Chuka-zanmai and the price competition


11

袋麺とカップ麺の販売金額推移

1 0 0 ,0 0 0

1 2 0 ,0 0 0

1 4 0 ,0 0 0

1 6 0 ,0 0 0

1 8 0 ,0 0 0

2 0 0 ,0 0 0

2 2 0 ,0 0 0

1 9 7 6 7 8 8 0 8 2 8 4 8 6 8 8 9 0

袋麺 (修正値 ) ｶｯﾌﾟ麺 (修正値 )

Transition of Sales Amount of Bagged Noodles and PotNoodles

Bagged Noodle(revised value)

Pot Noodle(revised value)

Origin: Drawn by Shintaku

Chuka-zanmai (Myojyo Foods Co.): launched in Oct. 1981, 90 Yen ◆Microwave -First period Limit in the diffusion into the market of households/housewives Multifunctional microwave intended to be an all-purpose cooking device -Second period Matsushita released a single-functional microwave at 50,000 Yen in 1980. Single-person market Non-cooking market Microwave foods


12

図６．電子レンジの生産・輸出推移

0

1 ,0 0 0

2 ,0 0 0

3 ,0 0 0

4 ,0 0 0

5 ,0 0 0

6 ,0 0 0

7 ,0 0 0

8 ,0 0 0

9 ,0 0 0

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

千台

0

5 0 ,0 0 0

100 ,0 0 0

150 ,0 0 0

200 ,0 0 0

250 ,0 0 0

300 ,0 0 0

百万

円

生産台数

生産金額

輸出金額

Diagram 6 Transition of Production/Export of Microwaves

Milli

on Y

en

Thou

sand

Uni

ts

Production Units

Export AmountProduction Amount

3.3 Life Cycle by Individual Product (Brand) ◆Windows98: Steep decline in sales

W indow s98

2

50

202

y = 116.57x-1.0457

R 2 = 0.8341

0

50

100

150

200

250

0 5 10 15 20 25 30 35

発売後日数

千本

販売本数(千本)

回帰曲線Sales Quantity (thousand pcs)Regression Curve

Thou

sand

Pcs

No. of Days after Launch

Windows98

◆Music CD: Steep decline in sales


13

音楽ＣＤのライフサイクル

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

発売後の週

売上（10枚）

タイトルA

タイトルＢ

タイトルＣ

タイトルＤ

初発率タイトルA DELICIOUS（ドリームズ・カム・トゥルー）3/25発売 30%タイトルＢ dAnce to positive (trf) 3/27発売 49%タイトルＣ forever you (ZARD) 3/10発売 35%タイトルＤ LA . LA. LA.（大黒摩季）7/19発売 35%

音楽ＣＤのライフサイクル

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

発売後の週

売上（10枚）

タイトルA

タイトルＢ

タイトルＣ

タイトルＤ

初発率タイトルA DELICIOUS（ドリームズ・カム・トゥルー）3/25発売 30%タイトルＢ dAnce to positive (trf) 3/27発売 49%タイトルＣ forever you (ZARD) 3/10発売 35%タイトルＤ LA . LA. LA.（大黒摩季）7/19発売 35%

Life Cycle of Music CDs

Ratio of Initial ReleaseTitle A: DELICIOUS (Dreams Come True), released on Mar. 25 30%Title B: dAnce to positive (trf), released on Mar. 27 49%Title C: forever you (ZARD), released on Mar. 10 35%Title D: LA. LA. LA. (Maki Oguro), released on Jul. 19 35%

Sales (10 pcs)

No. of Weeks after Release

Kato, Hiroyuki, Dissertation

◆Game Software

図 4 - 5　ヒットタイトルの売上パターンの比較対照

1 ,0 0 0

1 0 ,0 0 0

1 0 0 ,0 0 0

1 ,0 0 0 ,0 0 0

0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0

発売後週数

各週売

上本

数(対

数目

盛）

資料）メディアクリエイト売上データを筆者が加工。

Ａ：みんなのＧＯＬＦ（ＳＣＥ）

Ｂ：ファイナルファンタジータクティクス（スクウェア）

総売上初発率逓減率回帰曲線

Ａ 158万本 8% 61% Ｙ = 132715Ｘ-0.725

　R2=0.947

Ｂ 128万本 53% 30% Ｙ = 678997Ｘ-1.737

　R2=0.995

Diagram 4-5 Sales Pattern Comparison of Hit Softwares

A. Everyone's GOLF (SCE)

B. Final Fantasy Tactics (Square)

No.

of P

iece

s So

ld E

ach

Wee

k (l

ogar

ithm

ic s

cale

)

No. of Weeks after Release

Data: Sales data by Media Create Co., processed by the Writer

GrossQuantity Sold

Ratio of InitialRelease

DegressionRatio

RegressionCurve

A 1.58 mln pcs 8% 61% Y = 132715X -0.725 R2 = 0.947B 1.28 mln pcs 53% 30% Y = 678997X -1.737 R2 = 0.995


14

図4-2　売上推移の平均像

0

2

4

6

8

10

12

14

1 4 7 10 13 16 19 22

発売後週

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

各週売上

累積比率

初発率逓減率総売上本数

（万本）観測週

平均 0.296 0.499 40.247 23.7

標準偏差 0.499 0.162 4.697 10.1

最小値 0.032 0.249 3.682 15.0

最大値 0.716 0.979 327.378 72.0

サンプル数 104 104 104 104

注）メディクリエイト集計の売上データから、1997年と19

98年発売で15週以上の売上データがあるものを対象とした。

Diagram 4-2 Average Picture of Sales Transit

Sale

s in

Eac

h W

eek

(10,

000

pcs)

Weeks after Release

Sales in EachWeekCumulative Ratio

Note: This study has covered those released in 1997 and 1998, and having salesdata for 15 weeks or more, out of the sale date tabulated by Media Create Co.

Ratio of InitialRelease

DegressionRatio

GrossQuantity Sold(10,000 pcs)

No. of WeeksObserved

Average 0.296 0.499 40.247 23.7Standard Deviation 0.499 0.162 4.697 10.1

Minimum Value 0.032 0.249 3.682 15.0Maximum Value 0.176 0.979 327.378 72.0No. of Samples 104 104 104 104

Game softwares having exceptional sales trends


15

高初期値逓減型ではないと判定された「通常版」ソフト4タイトルとその売上推移

0

10000

20000

30000

40000

50000

60000

1 2 3 4 5 6 7 8 9 10発売後週数(発売週＝1)

売上本数

ＩＱ～インテリジェントキューブ

ぷよぷよSUN64ハイパーオリンピック　イン　ナガノ

さくま式人生ゲーム

Four "Ordinary Versions" of Softwares Judged Not To Be High-Initial-Price-Degressive Type and Their Sales Transit

Sal

es Q

uant

ity

No. of Weeks after Release (week of release = 1)IQ～Intelligent CubePuyo Puyo SUN64Hyper-Olympics in NaganoGame of Life in Sakuma's Formula

Title Maker Model Genre Date of ReleaseGross Quantity

Sold (A)Quantity Sold in

Week of Release (B)

Ratio of QuantitySold in Week ofRelease (B/A)

IQ～Intelligent Cube SCE PS Puzzle 01/31/97 633,154 20,281 3.20%

Puyo Puyo SUN64 Compile N64 Puzzle 10/30/97 124,403 15,609 12.50%Hyper-Olympics inNagano Konami PS Sports 12/18/97 230,267 27,401 11.90%

Game of Life inSakuma's Formula Takara PS Table Game 12/10/98 104,292 15,842 15.20%

▲Origin: Wada (2003), “Pattern of Sales Concentration in Infancy”, Shintaku, Tanaka and Yanagawa ed. Economic Analysis on Game Industry, Toyo Keizai Exception in music


16

ワダツミの木（2002/2/6発売）：総売上本数839420

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

1 6 11 16 21 26 31 36

発売後週数（発売週=１）

週間売上本数

Wadatsumi-no-ki (released 2/6/2002): Gross Quantity of 839,420 SoldW

eekl

y S

ales

Pcs

No. of Week after Release (week of release = 1)

二人のアカボシ（2002/1/9発売）：総売上本数227340

0

5000

10000

15000

20000

25000

30000

35000

1 3 5 7 9 11 13 15 17

発売後週数（発売週=１）

週間売上本数

Futari-no-akaboshi (released 1/9/2002): Gross Quantity of 227,340 Sold

Wee

kly

Sale

s Pc

s

No. of Week after Release (week of release = 1)

Origin: Drawn from date prepared by Takeaki Wada, University of Tokyo ◆Automobile - Odyssey Model change in Dec. 1999 Monthly sales target of 6,000 cars


17

Mar. 2000: 15,392 cars Jun. 2000: 14,600 Nikkei Sangyo Shimbun dated 7/4/2000

The figure is omitted due to copyright.


18

自動車モデル別売上推移

0

20

40

60

80

100

120

140

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

発売後月数

登録

台数

指数

スターレット9512F

スターレット9712M

ヴィッツ9901N

マークⅡ9209F

マークⅡ9409M

マークⅡ9609F

マークⅡ9809M

セルシオ9410F

セルシオ9708M

ｱﾙﾃｯﾂｧ9810N

注データは、各月の登録台数をベースにして、3ヶ月の移動平均をとり、さらに2ヶ月目の登録台数（発売後２、３、４ヶ月の平均値）を100とした指数に変換している。凡例について：「スターレット9512F 」は1995年12月にフルモデルチェンジされて発売されたスターレットを示す。末尾、Fはフルモデルチェンジ、Mはマイナーチェンジ、Nは新モデル。

コメント全体的には売上の逓減率が大きくなる傾向にあるのではないか。逓減率が大きいのは、97年発売のセルシオ、98年発売のアルテッツア、97年発売のスターレット。セルシオ、スターレットについては、前回のモデルチェンジ（94年、95年）よりも逓減率が大きくなっている。

ただし、マークⅡについては、必ずしもその傾向はみられない。ヴィッツの場合は、9ヶ月目から上昇している（99年11月から2000年3月にかけて）。この理由はいまのところ不明だが、ラインの大幅な増強があったのでは。受注台数でみた場合には、ヴッツの推移はかなり異なる様相になる可能性がある。

Starlet 9512FStarlet 9721MVitz 9901N

The data has been drawn as follows: Set as base the quantity of registered cars by month,and obtain a 3-month-moving average, and further, convert into the index by setting theregistered cars of the second month (the average value of 2nd, 3rd and 4th month after therespective launch) as 100.About the explanatory note: "Starlet 9512F" indicates a Starlet that was launched after afull-model change in Dec. 1995. Suffixed letter F is for "full-model change", M for "minorchange" and N for "new model".

CommentIn general it appears as though the sale degression ratio tended to grow higher.The high degression ratios are being seen with Celsior launched in 1997, Altezza in '98and Starlet in '97. As for Celsior and Starlet, their degression ratios are higher than onesfor the previous model changes (in '94 and '95, respectively).

However, such a trend is not necessarily observed for MarkⅡ.In case of Vitz, the sales went up from the 9th month (from Nov. '99 to Mar. 2000). Thereason for this is unclear to date: There might have been a significant line expansion.There is a possibility that the transition of Vitz could be largely different in case anotherexamination were made from its order-entry perspective.

Transition of Automobile Sales by ModelR

egis

tratio

n In

dex

No. of Months after Launch

MarkⅡ9209FMarkⅡ9409MMarkⅡ9609FMarkⅡ9809MCelsior 9410FCelsior 9708MAltezza 9810N

■

8 product life cycle - utokyo opencourseware...marketing strategy in the maturation period -to take...

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