sustaining product sales chapter 30.2 what is a product life cycle? a representation of the stages...

Product PlanningSustaining Product Sales

Chapter 30.2

What is a product life cycle?A representation of the stages that a product

goes through during its lifeThere are 4 stages of the life cycle

Introduction GrowthMaturityDecline

The Product Life CycleDollars

Time

Profit

Sales

Introduction

Growth

Maturity

Decline

Obsolete

Managing the IntroductionCompany is focused on

Promotion and ProductionGetting the customers attentionBuilding sales and customer awareness

Costs in this stage are high, therefore this is the least profitable stage of the cycle

Managing the GrowthThere is an increase in sales and profitsMost of the target market knows about and

buys the productCompany now focuses on

Customer satisfactionCompeting with rival companies

Managing the MaturitySales level off and slow downMore competition exists Most of target market owns the productCompany starts to think of ways to improve

the product

Managing the DeclineSales fall and there is profit lossWays to keep the product alive

Sell or license the productRecommit to the product line – try to increase

advertising and promotionDiscount the productRegionalize the product – sell only in areas

with strong customer loyaltyModernize or alter the product

Product PositioningThe efforts a business makes to identify,

place, and sell its products in the marketplaceThe goal is to set the product apart from the

competition A number of strategies can be used to

position products in the marketplacePositioning by price and qualityPositioning by features and benefitsPositioning in relation to the competitionPositioning in relation to other products in the

line

Positioning by Price and QualityA company may offer an economy line, a mid-

priced line, and a luxury lineStresses high price as a symbol of quality or

low price as an indication of value

Economy Line

Mid-priced Line Luxury Line

Positioning by Features and BenefitsProducts are often associated with a feature,

attribute, or consumer benefit

Positioning in Relation to CompetitionSome businesses position their products to

compete directly with the products of other companies

VS

VS

Positioning in Relation to Other Products in a Line

Individual products may be positioned in relation to other products in the same line

Original Palm Pilot

Zire

Tungston

Trio

Additional FeaturesMP3 playerView PhotosPlay Video Clips

Additional FeaturesE-mailSurf the Web

Additional FeaturesCell Phone Service

RepositioningWhen a product reaches the

decline stage of the product life cycle it must be changed – or repositioned

Repositioning – changing the identity or image of a product to redirect or expand the target market

Examples: Pledge

Pledge Commercial

Examples: Cheerios

Cheerios Commercial

Category ManagementA process that involves managing product

categories as individual business unitsA category may include a group of product

lines with the same target market and distribution channels

Goal – to put manufacturers and retailers in closer touch with customer needs

PlanogramsA computer developed diagram that shows

retailers how and where products should be displayed on the shelf…maximizing the products potential

AssignmentGet the Orange TextbooksComplete the questions from Chapter 30.2Questions 1-3 on page 647Questions 7, 8, 9, 10, 11 on page

649