Me, you, animals, plants, insects, and consumer products.
One of these groups listed above may seem like it does not belong, but trust me they all are on this list for a reason. This reason is because they all have something very important in common. Each of the groups listed above has a unique life cycle. I hope you picked out which life cycle I'm going to tell you more about today! I'm sure you guessed it, but just in case it's the product life cycle.
The product life cycle just like any other life cycle consists of stages. There are four distinct stages in this life cycle. What happens in each of this four stages provides very telling and useful information to marketers. By knowing what stage a product is in it allows decisions to be made that can make or break a product and at times maybe even a whole business.
The four stages of this cycle are the introduction stage, the growth stage, the maturity stage, and the decline stage. (Kerin, 266) A good way to remember these is just to think of the natural life cycle of any living thing. First we are born, or introduced into the world. Next we experience growth. At some point, hopefully, we begin to mature, both physically and mentally. Finally, though it is sad but the truth, we begin to slow down and head towards death. There is more detail to the product life cycle, but this is essentially how it goes as well. So here it goes...
1) The Introduction Stage
- "Product is first introduced to its target market" (Kerin, 266)
- Initial struggles
- Getting places of distribution
- Awareness
- Slow sales, small profit
- High initial investment
- Lack of awareness from consumer
- High costs from business
- Large advertising costs to make consumers aware of product/ need for product
- Pricing is set
- High prices set (skimming)
- More competition will be seen because higher prices can be set for a better profit
- Low prices set (penetration)
- Limits competition because prices are too low to compete and make a decent profit
- Fast growth in sales
- More awareness
- New consumers
- Returning, satisfied consumers
- Competition emerges
- Higher sales and greater demand for the product encourages others to enter into the market
- Changes are made
- New features are added to differentiate product from competitors
- Greater distribution
- Slowing sales
- Marketing costs directed to hold returning consumers
- Competitors
- Intense price competition
- Begin to leave the market
- Decreasing sales
- New technology can make product irrelevant to consumers
- Deletion
- Deleting a product completely from the market
- Decision that is thoroughly thought about due to remaining consumers
- Harvesting
- Product stays on market
- Keeps loyal consumers
- Costs no longer spent on marketing or advertising
As you can see the different stages in a product's life cycle can help tell marketers vital information. Some of this information includes what price to set their product at, when to enter the market, when to pull out of the market, how and where to spend their marketing costs, etc. These are factors that can really play an important part in making a profit on a product. Oh, and it is also important to remember that just because a product enters the declining stage does not mean it was not successful. It is just a natural cycle like any other life cycle.
Cited
Kerin, Roger A., Steven William. Hartley, and William Rudelius. Marketing. Boston, MA: McGraw-Hill/Irwin, 2004
Very, very informative!
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