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Industrial products

• Defined not only as a physical entity,


but also as a complex set of economic,
technical, legal & personal relationship
b/w buyer & the seller
Industrial product life cycle

Industry sales

sales &
profits
Industry profits

Introduction Growth Maturity Decline

Time
Industrial product life cycle
Behavior of PLC depends on three factors
• Changing needs of customers
• Changes in technology
• Changing competition
PLC concept also highlights the importance of
long term planning for a new product,
realization of competition & its impact on
profits at later stages.
Product life cycle for High – Tech product

SALES

TIME

Introduction & Growth Maturity Decline


NPD
Product life cycle for commodity product

SALES

TIME
PLC – Marketing strategies
INTRODUCTION STAGE
• Industrial products – accepted rapidly/ slowly after
introduction
• For slowly accepted products mkg. Strategy
should concentrate on market development efforts
• For products that are accepted fast, mkg. Should
be evolved to meet intense competition.
GROWTH STAGE
• Industrial marketer should focus the mkg.
Strategy on three ways
2. Improve product design to offer more benefits
to cover wider segments of the market
3. Improve distribution for product availability to
customers
4. Reduce the price as increased volume of
production lowers the cost
If these strategies are ignored by an industrial
marketer, competitors are encouraged to enter
the market.
Maturity stage
Marketing strategy
• Enter new markets
• Keep the existing customers satisfied
• Cut mkg., production & other costs to
maintain profit margins
Decline stage
Strategy adopted
-- Either withdraw the product from the market
or
-- Develop a substitute for replacement
or
-- Reduce mkg. & other expenses substantially
to make some profits
• For industrial products, the decline tends to
proceed rapidly since new technologies make
established products obsolete
Locating industrial products in their life cycle
Where a particular product is in its life cycle depends on no. of
factors like industry profits, change in sales growth & information
about competitors.Steps involved in locating are:
• Develop a trend analysis for past 3-5 yrs based on
information to be collected for an industrial firm for a
product, on qty.& value of sales, profits as a percentage
of sales, mkt. Share, no. of competitors & prices
• Analyze competitor
• Estimate & project sales & profits of the product over
next 3-5 yrs.
• From the above analysis, fix the product position on its
life –cycle curve