Presentation on theme: "Product & Product Life Cycles"— Presentation transcript:
1 Product & Product Life Cycles MarketingBUS 232Product & Product Life CyclesDr. Mohammed A. Nasseef
2 What is a product Jobber (2004) gives a simple definition : A product is anything that has the ability to satisfy a customer need
3 Delivery and installation Characteristics Affecting Consumer BehaviorThis CTR relates to Figure 5-2 on p.135 and previews the material on ppLevel of ProductCredit arrangementInfluences on ConsumersCultural. Culture is the most basic influence on a person's values, priorities, and beliefs. Cultural shifts make marketing opportunities although most such changes are in secondary rather than core cultural values. Subcultures are important markets as these groups are often significantly different in their needs to warrant different marketing approaches.Social. Social class is determined by a combination of income, occupation, education, wealth and other variables. Social factors within one's class that affect consumer behavior include reference groups & aspirational groups. Families also exert strong social influences. Finally, each relationship a person has with his or her group carries with it certain roles and status that may carry consumptive responsibilities.Personal. Major personal factors are age and life cycle stage, occupation, economic situation, life style and personality/self-concept. Texts vary in their treatment of the PLC stages but it is clear that singles buy different products than do young marrieds with small children. Occupations differ in time constraints and social pressures to conform that affect consumption decisions. Lifestyles measured by AIO or VALS typologies can reveal different consumption patterns across otherwise dissimilar groups. The unique characteristics of each person that make up their personality also affect behavior.Psychological. Maslow's hierarchy reminds marketers that need states vary in their intensity or motivation. Perception is the process of organizing stimuli and is influenced by selective exposure, distortion, & retention. Learning occurs in response to the presentation of information linked to relevant drives, cues, responses, and reinforcement only some of which is under the control of the marketer. Beliefs and attitudes, though shaped by cultural and social forces, may vary considerably on the individual level.QualityCore productFeaturesAndstylingwarrantypackagingAfter sales serviceBrand nameDelivery and installation
4 Product Life Cycles and Portfolio Product Life Cycle – shows the stages that products go through from development to withdrawal from the marketProduct Portfolio – the range of products a company has in development or available for consumers at any one timeManaging product portfolio is important for cash flow
5 Product Life Cycle (PLC): Each product may have a different life cyclePLC determines revenue earnedContributes to strategic marketing planningMay help the firm to identify when a product needs support, redesign, reinvigorating, withdrawal, etc.May help in new product development planningMay help in forecasting and managing cash flow
6 The Stages of the Product Life Cycle: DevelopmentIntroduction/LaunchGrowthMaturitySaturationDeclineWithdrawal
7 The Stages of the Product Life Cycle SaturationDeclineMaturityGrowthDevelopmentIntroductionSalesTime
8 The Development Stage Initial Ideas – possibly large number May come from any of the following –Market research – identifies gaps in the marketMonitoring competitorsPlanned research and development (R&D)Luck or intuition – stumble across ideas?Creative thinking – inventions, hunches?Futures thinking – what will people be using/wanting/needing 5,10,20 years
9 Product Development Stages Market analysis – is it wanted? Can it be produced at a profit? Who is it likely to be aimed at?Test Marketing – possibly local/regionalAnalysis of test marketing results and amendment of product/production processPreparations for launch – publicity, marketing campaign
10 Introduction/Launch: Advertising and promotion campaignsTarget campaign at specific audience?Monitor initial salesMaximise publicityHigh cost/low salestype of product
12 Maturity: Sales reach peak Cost of supporting the product declines Ratio of revenue to cost highSales growth likely to be lowMarket share may be highCompetition likely to be greaterMonitor market – changes/amendments/new strategies?
13 Saturation: New entrants likely to mean market is ‘flooded’ Necessity to develop new strategies becomes more pressing:Searching out new markets:Linking to changing fashionsSeeking new or exploiting market segmentsLinking to joint ventures – media/music, etc.Developing new usesFocus on adapting the productRe-packaging or formatImproving the standard or qualityDeveloping the product range
14 Decline and Withdrawal: Product outlives/outgrows its usefulness/valueFashions changeTechnology changesSales declineCost of supporting starts to rise too farDecision to withdraw may be dependent on availability of new products and whether fashions/trends will come around again?