Final Review
Q1. Please draw and explain, with examples, the typical product life cycle model,
identifying clearly the four stages. Please explain with
... [Show More] examples the different marketing
objectives and practices at each of the different stages. Also draw and explain, with at least
one example each, the product life cycle for a low learning, high learning (Chapter 11), fad
and fashion product. - Chapter 10
Product Life-Cycle Strategies:
Product Life Cycle (PLC): The course
of a product’s sales and profits over its
lifetime. It involves five distinct
stages: product development,
introduction, growth, maturity, and
decline.
1. Product development begins when
the company finds and develops a
new-product idea. During product
development, sales are zero and the
company’s investment costs mount.
2. Introduction is a period of slow sales growth as the product is introduced in the market. Profits
are non-existent in this stage because of the heavy expenses of product introduction.
3. Growth is a period of rapid market acceptance and increasing profits.
4. Maturity is a period of slowdown in sales growth because the product has achieved acceptance
by most potential buyers. Profits level off or decline because of increased marketing outlays to
defend the product against competition.
5. Decline is the period when sales fall off and profits drop.
The company wants to earn a decent profit to cover all of the effort and risk that went
into launching it. The PLC concept can help in developing good marketing strategies for its
different stages. But using it for forecasting product performance or developing marketing
strategies presents practical problems because strategy is both a cause and a result of the PLC.
The moral of the product life cycle is that companies must continually develop a steady stream of
new products that bring new value to customers or else they risk extinction.
Brands like Coca-Cola and American Express are still going strong after more than 100
years. The PLC concept can describe a product class (gasoline-powered automobiles), a product
form (SUVs), or a brand(the Ford Escape). A specific brand’s life cycle can change quickly
because of changing competitive attacks and responses. Although laundry soaps (product class)
and powdered detergents (product form) have enjoyed fairly long-life cycles, the life cycles of
specific brands have tended to be much shorter. Today’s leading brands is Tide and Cheer; 100
years ago was Kirkman.
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