* Product Life Cycles

Product Life Cycles

Product life cycles describe the changes in consumer demand over a time. No product can be in demand forever. Trends, technology and lifestyles change, which affects consumer demand.

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Product Life Cycles

maturity decline growth decision point
Time
Sales

introduction

The traditional product life cycle consists of five stages.

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Product Life Cycles

Introduction Stage

When a product is first introduced a product launch occurs. It may occur regionally, provincially, or nationally, depending on predicted demand.

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Product Life Cycles

Introduction Stage
Launching a new product is very expensive, so initially the price is high. Costs involved include: machinery, setup, training, promotion, storage, packaging, market research.

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Product Life Cycles

Introduction Stage
Who buys at this stage? Curious people, those who always want new things first: - early adopters - trendsetters.
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Product Life Cycles

Introduction Stage Main purpose of marketing is to inform the consumer about new products and to establish the value equation as early as possible.

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Product Life Cycle

Products currently in introduction

Growth Stage

Sales

growth

Time

Product Life Cycles

Growth Stage

After adopters find and use a product, others will follow. The product is visible, consumers see/hear others use it. Reputation spreads through word of mouth and advertising.
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Product Life Cycles

Growth Stage
The faster a product reaches the growth stage, the sooner it starts making a profit. The first company to enter a market will pay the most for development and advertising, but it will have a major advantage: No competition.
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Product Life Cycles

Growth Stage
As competitors enter the market, companies strive to maintain their market share: the companys sales as a percentage of the total for the market.

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Growth Stage

Product Life Cycles

Maturity Stage
The period during which sales start to level off
maturity
Sales

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Time

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Product Life Cycles

Maturity Stage Marketers keep the brand name in front of consumers. Often the success and longevity of the product is highlighted.

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Product Life Cycles

Maturity Stage
Because major costs have been recuperated and the cost of sales and distribution is low, products usually make large profits during this stage.

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Product Life Cycles

Maturity Stage
Often times companies will take this profit to develop new products and product launches. EXAMPLE: Disney took profits from its amusement parks to launch a cruise ship line. This also expands their brand name into a new market.
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Maturity Stage (LONG TIME)

Maturity Stage (Shorter Time)

Product Life Cycles

Decline Stage
Occurs when a company cannot find new consumers for their product. Profits decrease; marketers try to find the reason for the decline.
decline
Sales

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Time

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Product Life Cycles

Decline Stage
If it is a temporary decline
it may be reversed by a small price change in the design new ad campaign Change in the packaging

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Decline Stage

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Product Life Cycles

Decision Point Stage
The final stage of the product life cycle. Marketers must make important decisions regarding a products future.

Sales

decision point
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Time

Product Life Cycles

Decision Point Stage
A product may be reformulated, repackaged, and reintroduced. Most often maintenance of a product involves new promotion and new pricing.

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