product line decisions & product life cycle

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Product Line Decisions & Product Life cycle Seminar Presentation

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Includes Product line decisions along with their relative importance. The concept of product life cycle is also depicted using apt examples.

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Page 1: Product line decisions & Product Life Cycle

Product Line Decisions & Product Life cycle

Seminar Presentation

Page 2: Product line decisions & Product Life Cycle

What is a Product Line?

A product line is that combination of products which;

Belongs to a single manufacturer Shares similar Attributes Serves the common general purpose but; Targets different market segments

Page 3: Product line decisions & Product Life Cycle

Samsung

Page 4: Product line decisions & Product Life Cycle

Why Product line decisions?

Provides better market access

Involves huge investment/disinvestment

Products have close mutual influence

Page 5: Product line decisions & Product Life Cycle

Product Line Strategies

Page 6: Product line decisions & Product Life Cycle

Expansion of product lineProcess of adding more products to the lineValid only if; a) There is a well established brand arena &

customers are accustomed to switch.b) Competitor lacks a comparable productc) Competitor have already expanded to the

proposed area.

Page 7: Product line decisions & Product Life Cycle
Page 8: Product line decisions & Product Life Cycle

Contraction of the product lineDropping a product from the line.The reasons behind a drop may be;a) Fine tuning the market performanceb) Eliminating a poor performing productc) Uplifting a product with more potential

• This is a much difficult task since much money is already been invested and hence products are allowed to linger on until they become a loss.

Page 9: Product line decisions & Product Life Cycle

Out In

Page 10: Product line decisions & Product Life Cycle

Alteration of the existing productsAn alteration may be in;a. Designb. Size c. Colourd. Texturee. Flavourf. Packagingg. Advertising appeal

Page 11: Product line decisions & Product Life Cycle
Page 12: Product line decisions & Product Life Cycle

Developing new use for the existing productsThis is intended to attract a new category of

customers to the manufacturer without forming a new product.

Investments in R&D and Advertisement is required.

Page 13: Product line decisions & Product Life Cycle
Page 14: Product line decisions & Product Life Cycle

Trading UpAdding a high priced prestigious product to

the line so as to increase the sales of the existing low priced product.

Page 15: Product line decisions & Product Life Cycle

Rs. 2000 – Rs. 2500

Rs. 8000 -Rs 9000

Page 16: Product line decisions & Product Life Cycle

Trading DownIntroducing a low priced product to the

prestigious line so as to cater increased demand.

Page 17: Product line decisions & Product Life Cycle
Page 18: Product line decisions & Product Life Cycle

Factors influencing Product Line Decisions

Page 19: Product line decisions & Product Life Cycle

Changes in market demand

Competitive action

and reaction

Marketing Influences

Product influences

Financial Influences

Page 20: Product line decisions & Product Life Cycle

Changes in market demand

Page 21: Product line decisions & Product Life Cycle

Competitive action and reaction

&

Page 22: Product line decisions & Product Life Cycle

Marketing Influences

Page 23: Product line decisions & Product Life Cycle

Financial Influences

Page 24: Product line decisions & Product Life Cycle

Product Influences

Page 25: Product line decisions & Product Life Cycle

Concept of Product Life Cycle

Page 26: Product line decisions & Product Life Cycle

The conceptEvery product has a life cycle, just as in case

of human beings.A Product after being introduced in to the

market, goes through different stages which is categorised on the basis of product, profit, competition and market behaviours.

It is rather a managerial tool for forecasting & strategic planning.

Page 27: Product line decisions & Product Life Cycle

Stages of Life Cycle

1. Introduction2. Growth3. Maturity4. Saturation &5. Decline

Page 28: Product line decisions & Product Life Cycle

Introduction stageProduct is Introduced in the market for the

first time.Slow growth rateNegative or low profitsHuge marketing expensesNo competitionHighly volatile in nature

Page 29: Product line decisions & Product Life Cycle
Page 30: Product line decisions & Product Life Cycle

Growth StageSales rises at an increasing rateProfitable returns from the marketReduced promotional expensesHard work for the firm to establish

dealerships & distribution outletsCompetitors starts to explore the market

Page 31: Product line decisions & Product Life Cycle
Page 32: Product line decisions & Product Life Cycle
Page 33: Product line decisions & Product Life Cycle

Maturity StageSales are still increasing, but at a decreasing

rate.Severe competitionProfits fall in line with falling prices, which is

unavoidable to retain market share.Investments in promotional measures to

differentiate the productNew distribution strategies & alliances

Page 34: Product line decisions & Product Life Cycle
Page 35: Product line decisions & Product Life Cycle
Page 36: Product line decisions & Product Life Cycle

Saturation StageSales are stableProfits fall drasticallyCompetition is at the peakContinued need for promotion to maintain

salesFirm has to plan product modifications

Page 37: Product line decisions & Product Life Cycle
Page 38: Product line decisions & Product Life Cycle

The old TV is getting replaced by..

Page 39: Product line decisions & Product Life Cycle

DeclineCharacterised by falling sales for the whole

industry.Prize cutting is continued and profit is at zero

level.Firm has to take a major strategic decision

whether to continue with the product or abandon it.

Page 40: Product line decisions & Product Life Cycle
Page 41: Product line decisions & Product Life Cycle

This old roofing tile industry is now switching to...

Page 42: Product line decisions & Product Life Cycle

More examples for product replacement

Page 43: Product line decisions & Product Life Cycle
Page 44: Product line decisions & Product Life Cycle

The PLC Graph

Page 45: Product line decisions & Product Life Cycle

Graph with Profit curve

Page 46: Product line decisions & Product Life Cycle

An old PLC Curve!!

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ConclusionEvery product has got a life cycle and every

product will pass through the stage of decline someday.

But, through effective product line decisions and other strategies, we can extend its profitability period much longer to our benefits.

Page 48: Product line decisions & Product Life Cycle

Thank You!!