the product life cycle

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Transcript the product life cycle

THE PRODUCT LIFE CYCLE
THE PRODUCT LIFE CYCLE
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Products and services pass through
various stages over time.
These stages are known as the “Product
Life Cycle”
The rates of change, and the length and
intensity of each stage may vary, but
most life cycles follow roughly the same
pattern.
PRODUCT INTRODUCTION
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A product is developed and the company
attempts to build a market for the product
Sales are low: customers unaware of
product
Lots of money spent on advertising
Price is either low to attract attention or
high to recover development cost
High failure rate
GROWTH
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Sales increase, rapid growth
Due to increased sales, competition is
attracted
Wide advertising is carried out
Trying to gain customer preference
MATURITY
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Growth starts to flatten out
Sales remain flat
Product in this stage of development is called a
“Cash cow”
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You have paid off all the development expenses so
all the money you make is profit
Price maybe lowered
New features added to product to help fight
competition
Offered at more
locations
DECLINE
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Sales are decreasing…customers move
onto new products
Can be delayed/averted by advertising
Often times you will see “brand
extensions” during this time i.e.
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HOW MARKETERS USE THIS
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We all have all seen advertising done
with the use of product placement
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i.e. we are watching a movie and all of sudden
the lead character takes a Coke out of the
fridge…well Coke paid a lot of money to have
their product there (and not Pepsi)