The Product Life Cycle
A life cycle (PLC) are divided into several stages, characterized by the income generated by the product. If a curve is drawn showing the revenues over time, it can take many different forms, an example is shown below:
Product lifecycle curve
Product lifecycle curve
The concept of life cycle may be applied to a brand or a product category. Its duration can be as short as a few months for a fashion item or a century or for categories of products such as motor gasoline more.
Product development is the incubation of the product life cycle phase. There is no sales and the company is preparing to introduce the product. As it progresses product in its life cycle, changes in the marketing mix usually are required to adapt to the evolution of the challenges and opportunities.
When the product is introduced, sales will be low until customers become aware of the product and its benefits. Some companies may advertise their product prior to its introduction, but competitors also alert ads and remove the element of surprise. Advertising costs are generally high in this step to educate the client quickly product and target early adopters. During the introductory phase, the company is likely to incur additional costs associated with the initial distribution of the product. These costs more high, coupled with a low volume of sales usually make the introduction stage a period of negative profits.
During the introductory phase, the aim is to establish a market and generate the primary demand for the product class. Here are some of the marketing mix of the implications of the introductory phase:
Product - one or more products, relatively undifferentiated
Price - usually high, assuming a skim strategy for margin high price as early adopters buy the product and the company is seeking to recover the costs of development quickly. In some cases allows a penetration pricing strategy and call prices are low to gain market share quickly.
Distribution - Distribution is selective and scattered that the company has started the implementation of the distribution plan.
Promotion - Promotion aims at strengthening the reputation of the mark. Samples or incentives of the trial may be target early adopters. Promoting Introduction also aims to convince potential dealers to transport the product.
Growth stage
The growth stage is a period of rapid growth. Increased sales as more customers become aware of the product and its advantages and its additional market segments are targeted. Once the product has proved a success and customers are starting to wonder, sales will still increase in addition to retailers interested in wear. The marketing team can expand the distribution at this stage. When competitors on the market, often at the end of the growth phase, there may be competition by price and/or promotion fees increased in order to convince consumers that the product of the firm is better than that of the competition.
During the growth phase, the objective is to save the preference of consumers and increase sales. The marketing mix can be changed as follows:
Product - new features and packaging options; improvement of the quality of the products.
Price - maintained at a high level, if demand is high or reduced to capture additional clients.
Distribution - Distribution becomes more intense. Discounts are minimal if dealers showed a keen interest in the product.
Promotion - increased advertising to build brand preference.
Stage of maturity
Maturity is the most cost-effective. While sales continue to increase in this stage, they do so at a slower pace. Because the reputation of the brand is strong, advertising expenses will be reduced. Competition can lead to a decline of the market and/or price. Competing products may be very similar at this stage, more difficult to differentiate the product. The company is the effort by encouraging customers to competitors to pass, by increasing the use by the customer and converting non-customers. Sales promotions may be offered to encourage retailers to give the product more storage on competing products.
During the mature stage, the main objective is to maintain their share of the market and extend the life cycle of the product. Marketing mix decisions may include:
Product - changes are made and features
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