product life cycle 5.1 continued. product life cycle life cycle represents the stages that a product...
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Product Life CycleProduct Life Cycle
5.1 continued
Product Life CycleProduct Life Cycle
Life cycle represents the stages that a product goes through during its life in the marketplace– Four stages a product goes through
Introduction Growth Maturity Decline
IntroductionIntroduction
Occurs when the product is first introduced into the marketplace– Focus on promoting consumer awareness and
getting customers to try the new product– Skimming Pricing: high pricing to cover
research and development costs– Penetration Pricing: price a new product low in
comparison to other products in order to quickly create demand
GrowthGrowth
More competitors enter the market if they see that a new product is successful– Power Aid and Sportsade in response to Gatorade– To be competitive at this stage, the product may be
improved by adding new features or new products in that line
– Adding distribution outlets in important at this phase From just convenience stores and supermarkets to vending
machines
Maturity Maturity
Sales begin to slow down for the product category or just the product– Repeat customers may stop buying the product– New buyers are difficult to attract
DeclineDecline
When sales and profits begin to drop– Technological advances can cause enter
product categories to enter the decline stage– Companies end up dropping products in the
decline phase from their product line
Some ConsiderationsSome Considerations
Not all products fit the life-cycle patterns– FADS: products that become popular quickly
and lose popularity just as quickly Koosh Balls
Management of the Management of the Product Life CycleProduct Life Cycle
Product managers need to manage a product through its life cycle– Three Ways
Modify the product Market the product Reposition the product
Product ModificationProduct Modification
Changing the product’s characteristics– Features– Appearance– Packaging Design
Gatorade Fierce, Gatorade Ice, Gatorade Xtremo
Market ModificationMarket Modification
Strategy to find new customers or to encourage current customers to use more of the product– Gatorade Frost
RepositioningRepositioning
Involves changing a product’s image in relation to its competitor’s image– A change in any one of the 4 P’s can cause this change
– New Balance: redesign its athletic shoes for older people who have wider feet
No longer have to compete with Nike and Reebok directly Change their promotions to reach older people.
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