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Essay words 200 School life
Essay about Product Life Cycle
1502 Words7 Pages
Product Life Cycle
A new product progresses through a sequence of changes from introduction to growth, maturity & decline. This sequence is known as the “Product Life-Cycle” & is associated with changes in the marketing situation, thus impacting the marketing strategy & the marketing mix.
In the introduction stage, the firm seeks to build product awareness & develop a market for a product. The impact on the marketing mix is as follows:
• Product :- Branding & quality level is established & intellectual property protection such as patents & trademarks are obtained.
• Pricing :- The pricing strategy maybe one of ‘low penetration pricing’ to build market share rapidly, or ‘high skim pricing’ to recover…show more content…
• Pricing :- It maybe a bit lower than previous stages because of increased competition.
• Distribution :- It becomes more extensive. Distributors maybe offered with incentives to encourage preference over competing products.
• Promotion :- Greater emphasis on product differentiation & retaining existing consumer base.
As sales decline, the firm has several options:-
• Maintain the product, possibly rejuvenating it by adding new features & finding new uses.
• Harvest the product; reduce costs & continue to offer it, possibly to a loyal niche segment.
• Discontinue the product; liquidating the remaining inventory or by selling it to another firm that is willing to continue the product.
The marketing mix decisions in the decline phase will depend on the selected strategy. E.g. the product maybe unchanged if it is being harvested or liquidated. The price maybe maintained if the product is harvested, or drastically reduced if liquidated.
Some more extension strategies that extend the life of the product can be enumerated as follows:
• Advertising: Try to gain a new audience or remind the current audience about your product.
• Price Reduction: Reducing the price of your product to make it more attractive to consumers.
• Adding value to current product. E.g. video messaging on mobile phones.
• Add new products to same product line. E.g. new products with same brand name (“Line Extension”) or new product with a