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Product LIFE CYCLES

Product LIFE CYCLES. Product Life-Cycles. Describes the change in consumer demand over time & informs marketers when a change will be needed. No Product lasts forever Trends, lifestyles, & tech all change. Traditional Life-Cycle. Product Life Cycle has FIVE stages. Introduction.

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Product LIFE CYCLES

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  1. Product LIFE CYCLES

  2. Product Life-Cycles • Describes the change in consumer demand over time & informs marketers when a change will be needed. • No Product lasts forever • Trends, lifestyles, & tech all change

  3. Traditional Life-Cycle • Product Life Cycle has FIVE stages

  4. Introduction • Product Launch: the moment a new product is introduced to the market. • Expensive! • New machinery • Design costs • Promotions • Advertising • This is why new products aren’t cheap.

  5. Who buys this stuff? • That guy that always wants to have the newest gadgets… you know who he/she is. • Marketers call these people early adopters or trendsetters.

  6. Who is that guy? • He reads GQ, Cosmo, & In Style. • He loves to mimic celebrities… who get the products for free (marketing tool)

  7. New Product – PUSH/PULL • Marketers want to establish a connection with consumers and their product very early. • Pull: Adverts, coupons, etc • Push: dealer incentives, discounts, etc

  8. A bigger PUSH • Consignment: all the retailer to return any unsold products • Shelf Allowance: marketers pay money to a retailer to provide the prime space in the store. Is this bribery?

  9. Growth Stage • After the product launches and establishes its initial base it grows by: • Being Visible in advertising • Visible in daily life • Word of Mouth • This stage is crucial. Will it take off or will it be a bust?

  10. The faster, the better… • The quicker a product grows in popularity the more time it has to make a profit. • More advertising • Less competition

  11. Obstacles… • Market Share: is a company’s sales of goods or services as a percentage of the total market. • More competitors = smaller market share • This is when the original product sees upgrades and added features • Barriers To Entry: factors preventing a company from generating profit. • Small market • Cost of research • Advertising expenses • Design and Production Costs

  12. The Answer… • A low-end Product…

  13. Maturity Stage • This is when the sales of a product increase slowly, if at all. • Marketers want to keep their brand name out there. • Often they have recouped all their production/marketing cost and can now make a big profit. • Businesses take the money made in this phase to develop new products.

  14. Decline Stage • When there a no new customers for a product, it is on the decline. • Quick Fix = Price Drop • End Game = Pull it off the market

  15. Decision Point Stage • Time to pull the plug or remarket the product with pricing or rebranding strategies…

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