Product life cycle By: Brian Smith Jon Xu Nick Gland Maddie Mansi
Students will know • What a product life cycle is • What the BCG Matrix is • The 4 stages of a product life cycle • How the BCG matrix works • How the Product life cycle graph works • How the life cycle effects the BCG Matrix
Product life cycle • Definition- Identifies the stages a product goes through from the time it enters the market until it is no longer sold • Products go through four stages in their life cycle. • By studying the competition a business can determine the type of marketing mix needed in each stage of the product life cycle
Product life cycle stages • Introduction: New product introduced to market. Usually has no direct competition and competes with older more established products • Growth: If a new product is introduced successfully, then it will attract more customers and sales will begin to grow. Competitors will see that the product offers profit and try to enter the market with their own brand
Product life cycle continued • Maturity: Growth of sales begins to decline. Competitors may have come out with similar products. At this point, a company wants to defend their market share. • Decline: This is when product sales begins to decline. Your product is probably outdated or not innovative by now. Instead of losing more money, firms may withdrawal that product or reduce costs.
How to read a BCG Matrix graph • The Dog stands for a low growth and a low market share, because of this it has a low profit with high investment • Question mark means High growth and low market share, It has low profits but needs high investments.
How to read a BCG Matrix graph • Stars are when your business has high growth and high market share. • The cow means that there is a low growth and a high market share, because of this your investments should be low with high profits.
Product lifecycle & BCG Matrix relation They’re not directly related but they both describe lifecycles of businesses or products.
How they both apply to real life • Example of product life cycle: The Ipod 1: First introduced in 2001, was a huge market success, knock offs were soon made. • 2: They made all the ipod variations with more memory and capability • 3. the Ipod classic was eventually beaten out by the Ipod touch, and other touch screen items. • 4: It was declined when the Iphone came out.
How they both apply to real life Example: Apple 1: The first year apple was a business they were a dog. 2: They quickly over took the personal electronic Industry, beating out the blackberry as #1 (star)
Conclusion • Now you should know… • What a product life cycle is • What the BCG Matrix is • The 4 stages of a product life cycle • How the BCG matrix works • How the Product life cycle graph works • How the life cycle effects the BCG Matrix
Activity • Find a product that has gone through the product life cycle and describe the stages it went through
Activity • Name a company for each of the 4 quadrants of the BCG matrix
up next… • POP QUIZ!!!