Product Life Cycle Strategies.ppt

PRODUCT LIFE CYCLE The product life-cycle is the course of a product’s sales and profits throughout its lifetime. In the first stage, the product development stage, the product does not actually have a life. As such, it isn’t actually one of the four main stages of the product life cycle. In this stage, sales are zero and the company’s investment costs increase. PRODUCT LIFE CYCLE (Cont.) The nest stage is the introduction stage. Characteristics of this stage are as follows: Sales – Low sales 销量低 Costs – High cost per customer 单位成本高 Profits – Negative profits Marketing Objectives – Create product awareness and trial Product – Offer a basic product Price – Use cost-plus strategy Promotion – Build product awareness among early adopters dealers Distribution – Build selective distribution PRODUCT LIFE CYCLE (Cont.) The nest stage is the growth stage. Characteristics of this stage are as follows: Sales – Rapidly rising sales Costs – Average cost per customer Profits – Rising profits Marketing Objectives – Maximise market share Product – Offer product extensions, service , warranties Price – Price so as to penetrate the market Promotion – Build awareness and interest in the mass market Distribution – Build intensive distribution PRODUCT LIFE CYCLE (Cont.) The nest stage is the maturity stage. Characteristics of this stage are as follows: Sales – Sales stabilise Costs – Low cost per customer Profits – High but decreasing profits Marketing Objectives – Maximise profits while defending market share Product – Diversify brands and models Price – Price to match or beat competitors Promotion – Stress brand differences and benefits Distribution – Build more intensive distribution PRODUCT LIFE CYCLE (Cont.) The nest stage is the decline stage. Characteristics of this stage are as follows: Sales – Declining sales Costs – Low cost per customer Profits – Declining profits Marketing Objectives – Reduce expenditure and milk the brand Product – Phase out weak items Price