The Product Life Cycle

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The Product Life Cycle
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Product Life Cycle..
No of sales
Saturation
Maturity
Decline
Growth
Launch / Introduction
Time line
Research Development (RD)
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Where would you place these products on the life
cycle?
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Product Life Cycle..
No of sales
Saturation
Maturity
Decline
Growth
Launch / Introduction
Time line
Research Development (RD)
5
An enlightening video????

• Explain why the standard 100 watt light bulb is
  being phased out by leading retailers
• Why are customers prepared to pay a higher price
  for energy-saving light bulbs?
• How does this link to the Product Life Cycle?

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Typical products at different life stages.

• R D
• Introduction
• Growth
• Maturity
• Decline

For each product decide what life stage it
belongs to!
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R D - Tesla

• Tesla sponsored by Founder of Paypal an
  electric sports car capable of 250 miles on 1
  charge, 3 hour recharge, 0-60 in 4 sec top
  speed 130mph only 50,000

Initial design RD
Launch model.
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Roll up TV Screen

• A pioneering Teesside research facility aiming to
  make a paper-thin roll-up TV screen become a
  reality, has received backing from a major
  international player.
• The then make-believe subject of flexible roll-up
  computer and TV screens featured in the Tom
  Cruise film Minority Report in 2002. But thanks
  to Teesside expertise that fiction could soon
  become a reality.

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Identify the implications of each life cycle
stage.
  RD INTRODUCTION GROWTH MATURITY DECLINE
Sales none   Low      
Cost per unit  Very High  Falling     Very Low 
Competitors  Very Few     Lots  
Product  Prototype        remove weaker items
Promotion focus  raise media curiosity    target new segments    
Distribution  None Limited       
Price  not for sale! Skimming or penteration  Penetration or push up price Competitive price Increase to exploit loyal customers? Or Discount
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Identify the implications of each life cycle
stage.
ANSWERS
  RD INTRODUCTION GROWTH MATURITY DECLINE
Sales none   Low  speeding up At highest Falling
Cost per unit  Very High  Falling Falling At lowesr Low 
Competitors  Very Few  few  growing Lots Falling
Product  Prototype One basic model Product modification improvements New models, diversified  remove weaker items
Promotion focus  raise media curiosity Build awareness  target new segments Stress differences with competitors Lower budget to keep costs down
Distribution  None Limited  Growing no of outlets High levels of distribution Reduce unprofitable channels
Price  not for sale! Skimming or penteration  Penetration or push up price Competitive price Increase to exploit loyal customers? Or Discount
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Extension Strategies

• These are ways to re-invigorate sales of a
  product after sales have hit maturity!
• New uses for product
• Enter new markets
• Develop product range
• Change packaging
• Encourage more frequent usage!

Can you think of any recent products that have
used any of these extension strategies?
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Product Life Cycle..
No of sales
Saturation
Maturity
Decline
Growth
Launch / Introduction
Time line
Research Development (RD)
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The Product Mix

• Is where a company phases out old products and
  introduce new ones.
• The company tries not to have a vacuum of sales
  i.e. a gap
• When one product is declining another is growing
  while a third might just be about to be launched.

What would this look like?
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Why use the Product Life Cycle?

• Identify trends /possible revenue to be earned
• Identify times in future where a company should
  INVEST in RD
• Identify when extension strategies should be used
• Identify when to end the life of a product.

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Another video clip

• New technology. In development

The future of Keyboards Swype!
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Product Life Cycle..
No of sales
Saturation
Maturity
Decline
Growth
Launch / Introduction
Time line
Research Development (RD)
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Non-Traditional PLCs
A fad is a product that is extremely popular for
a very short period of time. Knockoffs may
quickly hit the market to capitalize on the fad.
Some products have a very short growth stage that
leads to a solid, but not financially
spectacular, maturity stage. These products have
a niche a section of the market in which they
dominate and into which very few competitors
enter.
Many products are popular only during a specific
time or season. The product becomes popular
again only when the season returns.