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MANAGING PRODUCT LIFE CYCLE

Stage
Characteristics Sales Profit Strategic thrust Customer targets Competition Differential advantage

Introduction

Growth

Maturity

Decline

Low Marginal or even loss Market development Non-users; innovators Few, less known Superior performance; new benefit; features

Fast growth Rapid rise Penetration Form new segments Intensive growing with time Brand name, corporate identity

Slow growth Falling margins Defend share Shed segments Many efficient ones Price, unique service

Decline Low margins Cut cost, reposition or withdraw Selective; explore new market Limited Business experience; low cost producer

Stage
Marketing mix

Introduction

Growth

Maturity

Decline

Product

Unique offering

Improvement on early innovation

Different variety

Rationalize range

Price

Low or premium

Low with, high volume


Heavy

Maintain margin

Smaller margin

Promotion

Incentive to use

Parity, loyalty formation Value for money

Threshold level for reminder Rationalize

Advertising focus

Awareness building

Brand name, performance Fast spread out

Distribution

Build network

Choose specific territory vis--vis competition

Limited coverage or enter new market and develop new form of distribution

Current products Existing market Market penetration strategies Increase market share Increase product usage: - increase frequency of use - increase quantity used - new applications Marketing innovation and expansion strategies Expand markets for existing products: - geographic expansion - target new segments

New products Product development strategies Product improvement Product line extensions New products for same markets

New market

Technological innovation and diversification strategies Vertical integration: - forward integration - backward integration Diversification into related business (concentric diversification)

NEW PRODUCT DEVELOPMENT

Adding
Customer based New customers attracted Old customer cannibalization Confusion and dilution of brand equity Operations based

Dropping

Old customers lost Customer switching Signal of weakness

Loss of economies of scale


Problems in gaining additional distribution Additional servicing needs

Impaired efficiency
Maintaining distribution Servicing old versions

Product Modifications
Continuous quality improvement, redesign, and updated styling points toward modifying the product. Modification can be of three types: Clearly better(e.g., an upgrade); Different (e.g., a styling or ingredient change that is likely to appeal more to some customers and less to others), and Inferior (e.g., the substitution of a less expensive ingredient or aspect of the offering)

Product Mix and Line Decisions


Product mix is the set of all product lines and items that a particular company offers to buyers. The width of a product mix refers to how many different product lines a company carries. The Depth of a product mix refers to how many variants of each product are offered in the line;

Product Line It is a group of products that is closely related because they perform similar function; targeted at the same customer groups, and marketed through the same channels.

Line Stretching Line Filling Line Modernization Line featuring

Managing Line Extensions


Factors that explain why so many companies have pursued line extensions as their marketing strategies: Customer segmentation Consumer desires Pricing breadth Excess capacity Short-term gain Competitive intensity Trade pressure Energizing a brand Exploitation of variety fulfillment Expanding a brands core promise to new users Managing true innovation Blocking or inhibiting competitors Managing a dynamic environment Testing ground for national launch

CLASSIFICATION OF NEW PRODUCTS:

New product launches can be broadly into three categories: Marketing innovations Product improvements Technological innovations

NEW PRODUCT DEVELOPMENT PROCESS:


The product development process consists of the following stages: 1. Idea generation the sources of new product ideas include:- Customers; Competitors; Active search; Category analysis; Brainstorming; Distributors; Creative techniques; External world; R&D 2. Consumer insights and new concepts 3. Business analysis 4. Prototype development 5. Test marketing 6. Commercialization

Key marketing preparation before a New product Launch Identification of Consumer needs Clear Segment Formation by Effective Market Research Choose a Proper Positioning Platform Effective Promotion/Advertising Ensuring Product Quality Effective Sales and Distribution Correct Pricing Strategy Differentiation of the New Offering Leveraging Existing Strengths

Some successful New Product Launches in India


ITC Aashirvaad Flour factors of success include

Product Pricing and promotion Packaging Communication


Distribution reach Differentiation Price-value equation Consumer sensitivity

Kinley factors behind the success include

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