Product Life Cycle Strategy.pptx

Product Life Cycle strategy

Factors determining product life cycle • • • • •

Market conditions Growth of particular market segment Trends in buyer’s spending capacity Technological developments in the industry Company policy of planned product obsolescence

Characteristics of different stages of PLC and marketing mix strategies • 1. 2. 3. 4.

Introduction stage Growth is low Sales volume is low Product awareness is limited High marketing cost on account of cost associated with launch of the product and setting up of distribution network. 5. Profits are unlikely at this stage. Focus 1. Build awareness about the benefits of the product category 2. Establish distribution network

Marketing strategies at introductory stage 1. Product strategies-smaller packages 2. Place strategies – creation of network distribution throug offers, schemes or discounts 3. Promotion strategies- education, reaching the opinion leaders, targeting the innovators/early adopters, category growth 4. pricing strategies – introductory pricing, penetration pricing strategy

• Growth stage – significant percentage of market becomes aware of the product and its benefits and the product gets established, the growth stage starts • Characteristics of growth stage 1. Rapid growth in sales and profits 2. Economies of scales for the production 3. Even lower prices are possible on account of lower cost of production, which lead to additional growth. Focus 1. To Build brand preference 2. To Increase the market share

• Marketing strategies for growth state 1. Product strategies – brand reinforcement, modification or value addition in the product design, making the product more relevant for the customers, launching medium packaging 2. Pricing strategies –lowering the price 3. Place strategies –strengthening relationship with distributor, deepening the penetration 4. Promotion strategies – increase in promotional budget, highlighting the quality or performance of the product, targeting the early majority.

• Maturity stage: when the strong growth in sales figure diminishes and price and product competition becomes even more intense, the arrival of the maturity stage is signaled. • Characteristics of maturity stage 1. Intense competition 2. Similarity or standardisation of products and services 3. Weaker or non-serious players who were there in the market in order to make easy profit from increasing demand gradually start withdrawing from the market in face of tough competition. 4. This is the dream stage for sales and marketing professionals, from the perspective that maximum sales and maximum profits are attained at this stage. Focus 1. Defending the market share 2. Maximising the profit

• Marketing strategies for maturity stage 1. Elongate the maturity stage 2. Product strategies –revitalise theproduct, product differentiation to avoid commoditisation of brands, R&D to enhance features 3. Promotion strategies –modification in promotion mix, brand repositioning, promote product differentiation, target late majority and laggards. 4. Place strategies – deepen the distribution network, incentives to the channel partners. 5. Price strategy – lowering prices

• Decline stage: decline of product categories can be caused to some extent by change in the consumer preferences, technology, etc • Characteristics of decline stage 1. Sales starts dropping 2. Demand diminishes 3. Market for product category shrinks 4. Inventories start piling up 5. Overall profits start declining for the entire industry

• Marketing strategies for decline stage 1. Rejuvenate the product – revive the product by adding additional features, harvest the product. 2. Liquidate the product

Application of product life cycle in rural markets – a critical analysis • Same product category may be in maturity stage in the developed rural market segments, in the growth stage in thedeveloping rural world and it might be in introductory stage in the under developed rural market segments. • A brand can die when the product category was just in the introductory stage itself. • Organisation need to make a realistic assessment whether the decline of sale of product is due to internal or competitive forces or it is really that the product category as such has entered decline stage.