Concept Introduction Growth Maturity Decline PLM 4.03 Acquire a Foundational Knowledge of Product/Service Management to Understand the Nature and Scope

Objectives Define the term product/service management Explain who is responsible for managing products/services. Describe the benefits of product/service managing. Describe the phases of product/service managing. Explain the role product/service management plays in marketing.

Vocabulary Product/Service Management Pure Services Product Life Cycle Management Concept Introduction Stage Growth Stage Maturity Stage Decline Stage

What Is Considered A Product? Product is a marketing element referring to what goods, services, or ideas a business will offer its customers. Goods or services may consist of Existing Products that are currently being sold. Goods may be sold with Product-related Services, which may consist of product maintenance, delivery or repairs. Pure Services are provided to the customer without the involvement of product such as cleaning services, doctors, law care, barbers/hair dressers, etc. The ultimate goal of a product is to provide a benefit (advantage) to the customer for using the product.

What is Product Life Cycle Management? Product Life Cycle Management (PLM) is the design and implementation of strategies used by Marketing Professionals which focuses on the process of managing the various stages a product goes through from creation to end-of-life. PLM is necessary as changes in the market occur over time. Product Life Cycle encompass the stages from generating a new product idea through taking the product off the market.

Dr. Charles W. Hofer “The most fundamental variable in determining an appropriate business strategy is the stage of the product life cycle.” In other words, PLM plays a role in planning and allocating the necessary resources to ensure higher product/service success rates for a business. Dr. Hofer is a Professor of Strategy & Entrepreneurship and named one of the Top 18 Entrepreneurship Professors in the U.S. by Fortune Small Business magazine in 2003. He has also won many other awards and academic honors in entrepreneurship education.

Why use Product/Service Management? Product/Service Management is a marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.

PLM Stages Product Life Cycle Management

Concept The idea for a new or modified product/service occurs. Brainstorming to identify product/service specifications, and research. Product Development occurs, which is the stage in creating a Prototype. A Prototype is a working model maybe tested, modified, and retested prior to production in order to provide insight on cost to produce, promote and distribute the product. Test Marketing may occur by introducing the new product to a limited market to determine customer acceptance. Once the product goes into full-scale production, Commercialization occurs; these are the activities that involve creating/implementing a marketing plan, establishing sales and service training, and the start of the Product’s Life Cycle.

Introduction Introduction Stage is when the product first appears in the marketplace. New Products include Goods (tangible objects that can be manufactured or produced for resale) or Services (Intangible activities that are performed by people) that have not been offered before, or have been modified to enter the market. Characteristics: High start-up costs with little-to-no profit Sales are slow in the beginning Little-to-no competition Customers must be enticed to buy your product in order to generate demand

Growth The Growth Stage occurs when a product has been successfully launched. Characteristics: Costs begin to decline Sales increase significantly resulting in profit New customers are obtained as public awareness increases Existing customers make repeat purchases New dealers and distributors are added Competitors begin to copy and improve on the features of the new product resulting in increased competition and a soon decline in profits at the end of this stage

Maturity Corporate Brand recognition occurs as customers begin to develop impressions and have experiences utilizing the product/service provided by your company. Characteristics: Due to production increases, costs begin to decrease Market saturation is reached; therefore, sales peak Competition increases, resulting in lowering prices Businesses begin to focus on emphasizing product features and brand recognition in order to maintain/increase market share Profits begin to decrease

Decline Final stage of the product life cycle in which products become Weak Products resulting in a rapid decline in sales and profits. In this stage companies may decide to: Redesign or enhance the product Design a new marketing plan Make the decision to drop the product

Video http://www.youtube.com/watch?v=CRfjJ9yOyp0

References http://business-fundas.com/2011/product-life-cycle-management/ http://en.wikipedia.org/wiki/Product_lifecycle_management Hofer, Charles (1978), Strategy Formulation: Analytical Concepts, St. Paul, MN. West Publishing Co. http://www.slideshare.net/birubiru/lesson-30-plc-product-life-cycle

4.03 Video Case Study: http://news.bbc.co.uk/2/hi/uk_news/7814502.stm 4.03 Crossword Lesson Activity