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The product lifecycle (PLC) Products need managing throughout their working lives.
When an older product is past its prime and needs modification or withdrawal from the market.
Figure 8.1
Priority is to generate widespread awareness of the product among the target segment and to stimulate trial of the product.
Innovative products need to build primary demand. Where introducing products to an existing market - offer to different segments of other additional benefits and features.
Product
Price Distribution Promotion
Need to consider ways to rejuvenate products to stop them going into decline.
Price
Distribution Promotion
Once a product goes into decline for market based reasons, it is almost impossible to stop it.
Decline can be as a result of a number of reasons, e.g. environmental or technological issues or poor management. This phase can absorb a great deal of management time for relatively little reward.
Marketers have to decide whether to slow the decline down or to milk the product.
Figure 8.2
Market evolution
Types of Innovations
Continuous--same product, just small improvements over time--e.g., typical automobile/stereo system model changes Dynamically continuous--product form changed, but function and usage are roughly similar--e.g., jet aircraft, ball point pen, word processor Discontinuous--entirely new product; usage approach changes (e.g., fax)
Fax machines
Network economies
Rap music
Low barriers to entry Spread to a new consumer group
Credit cards
Chicken-and-egg problem Jump-starting the cycle
Hybrid corn
Trialability Imitation
Risk to expected benefit ratio (relative advantage) Product pricing Trialability Switching difficulties and learning requirements/ ease of use
Adoption & Diffusion of Innovation Five categories and profiles of product adopters
Innovators 2.5%
Early majority 34% Late majority 34%
Laggards 16%
Innovators:
Venturesome, higher educated, use multiple information sources
Laggards:
Fear of debt, neighbors and friends are information sources
Early adopters:
Leaders in social setting, slightly above average education
Late majority:
Skeptical, below average social status
Technological impact
Classifying competitors
Early imitators.
Early differentiators. Early nichers.
Late entrants.
Table 8.1
Hard to forecast sales level, length of each stage, and shape of PLC