PRODUCT LIFE CYCLE AND MANAGEMENT OF THE MARKETING MIX 1.

Product life cycle

- The process which a product passes through from birth (development) to death (withdrawal).

- The changes that may take place in the health or the fortune of a product during the period it is on the market.
- This process is classically grouped into four stages introduction, growth, maturity and decline. Before introduction, is a painstaking development process.

2. Stages in the Product Life Cycle (a) Introduction Stage A period of entry into the market. Unknown to its prospects so no benefit appreciation. No image or personality of its own except if under a known brand. No or low trial and no market share. Negative margins. Foundation laying unappreciated efforts since investments yield minimal sales 2 returns.

(b) Growth Stage

Rapid market acceptance & sales growth Repeat patronage results in profit growth. Imagery & Goodwill build-up. Investment yields, more than commensurate returns. Fierce competition from big players. Expansionist & penetration strategies. Risk taking approaches.
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(c) Maturity Stage

Peak awareness, patronage & sales Market share gain is on competitor mistakes & expense. Care taking or maintenance rather than risk taking or developmental efforts. No new reason for consumer patronage. Growth rate slows down & stagnates. Incremental returns on new investments very low. Longest stage in a product life cycle. Returns run almost on inertial force. Vulnerable to competitive threat.

(d) Decline Stage:

Negative growth in sales and profit. Negative returns on marketing investment. Very low competitive capacity and possible market decline. Increased consumer switch-off Low returns to the trade & slower off-take.

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VARIOUS PATTERNS OF PRODUCT LIFE CYCLE

Sale Vol.

Time

Important Factors - Market Type - Product Category - Product - Marketing Strategy - Competitive Intensity
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IMPORTANT FACTORS AFFECTING PRODUCT LIFE CYCLE (a) MARKET TYPE New or Existing Growing, Mature or Declining Single or variety of products Well supplied or shortages Key Factors for success
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(b) Product Category

Type of product (cultural, I.T., Specialty appeal) Homogeneity of products

New or Existing
Key Factors for success Obsolescence factors & rate
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(c)

Product

Level of differentiation

Image & Goodwill (owned or acquired)

Resources available

Other competitive advantage

Marketing Strategy
Level of marketing effort

Mix of marketing effort

Relevance to Key Success Factors

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(e)

Competitive Intensity

Number, Resources & Nature Characteristics of Competing Products Market Shares Missions, Cultures and Strategies.

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4. Introduction Stage Marketing Implication Type of product being introduced imitative improvement innovative brand new Objective for introduction replacement competitive bolstering competitive pecking market expansion or segmentation
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Introduction Stage

Overhead cost appointment.

Budget generosity & profitability

consideration.
Sales forecast (or projection) realism. Non-sales performance evaluation criteria. Complete understanding of the marketing environment. Focus on awareness & trail based on benefits.
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4b. Managing the Introduction Timing of development and launch. (loud or silent placement)

Developing the distribution channel - prospecting for channel members (number, location, size, credit) - independent or joint channel members distribution concept few mega or many mini distributors - fighting for visual market share. identifying entire points through nicking.
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Managing the Introduction

Communication strategies - benefits - rational & differentiating appeals - media mix and selection Sales promotion

- awareness
- trial - distribution build-up Pricing - introductory penetration or imagery - price stabilization & low margins Missionary salesmanship is emphasized.
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Let Us Discuss Cowbell Milk Strategy

Important Factors - Market Type - Product Category - Product - Marketing Strategy - Competitive Intensity
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5. Growth Stage Marketing Implication Distribution Expansion roll outs & retail development.

Increased penetration of households

Repeat purchase build up promotions

Strong order getting sales emphasis

Image enhancement Intensive communication Offensive competitive strategy Price adjustment possibilities
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Let Us Discuss the G.S.M. Industry

Important Factors

- Market Type
- Product Category

- Product
- Marketing Strategy

- Competitive Intensity
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6. Maturity Stage Marketing Implication

Maintenance of existing patronage through stable product quality and customer service. Effective order taking and delivery salesmanship. Ensuring efficient distribution system to avoid stock outs and shortages at retail ends. Product improvement, packaging diversification to keep peripheral users.

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Maturity Stage Product repositioning and development of varieties to expand user base and ward off competitive deduction.

Communication to reassure consumers of product modernity and relevance. Sales promotions that encourage loyalty of retailers and consumers.
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Let Us Discuss Omo Strategy

Important Factors - Market Type - Product Category - Product - Marketing Strategy - Competitive Intensity
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Decline Stage Marketing Implication

Milking the cow before death

Winding down on marketing &

distribution costs.

Rationalizing outlets, locations and

supply quantities. Keeping channels loyal and open through replacement products. Converting consumers to replacement

by encouraging switching.

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Let Us Discuss the I.T. or Automobile Industry

Important Factors

- Market Type
- Product Category

- Product
- Marketing Strategy

- Competitive Intensity
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SUMMARY
Every product has a unique cycle. management is therefore customized rather than standardized.

The application of the marketing mix elements should consider the customization requirement.

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 Imitative marketing effort in a competitive environment is therefore not usually recommended. Withdrawal of non performing

products is not a marketing failure.

Replacements make for a rejuvenation of the total offering to the consumer.
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Managing the Product Portfolio A good portfolio has products at different stages of their life cycle. The health of each product must be monitored and evaluated with its stage in life. It makes sense to ensure healthy products. Anyone that is failing in health permanently should be replaced.

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