...stages in the product life-cycle. Discuss the strategies that marketers could utilize as the product goes through each stage of the product life cycle. First is introduction stage, this stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector. Example is 3D TVs which need to compete with the LCD’s TV in pricing and cost. The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage. Example is Smartphone. Nowadays, people getting interest to buy smartphones as they can fully utilize the phone to help them in daily activities. During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications...
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... MBA IN MARKETING AND ENTREPRENEURSHIP COURSE TITLE: SERVICE MARKETING AND PLANNING MANAGEMENT COURSE CODE: MKTG 627 PARTICIPANTS NAME: SAITOT K JOEL REG //: 2015010034 NAME: STEPHEN L SULTAN REG //: 2015010035 LECTURER’S NAME: Dr. JANETH ASSIGNMENT N0 1 Describe the stages of the product life cycle and how marketing strategies change during the product life cycle. INTRODUCTION All products and services have certain life cycles. The product life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in phases. During this period significant changes are made in the way that the product is behaving into the market i.e. its reflection in respect of sales to the company that introduced it into the market. Since an increase in profits is the major goal of a company that introduces a product into a market, the product’s life cycle management is very important. Some companies use strategic planning and others follow the basic rules of the different life cycle phase that are analyzed later. The understanding of a product’s life cycle, can help a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the product’s success or failure. For a company to fully understand the above and successfully manage a product’s life cycle, needs to develop strategies...
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...Understanding the Product Life Cycle (PLC) is of critical importance to a firm launching a new product. It helps a firm to manage the risk of launching a new product more effectively, whilst simultaneously maximising the sales and profits that could be achieved throughout the product's life cycle. 1. What is the product life cycle? The PLC indicates that products have four things in common: (1) they have a limited lifespan; (2) their sales pass through a number of distinct stages, each of which has different characteristics, challenges, and opportunities; (3) their profits are not static but increase and decrease through these stages; and (4) the financial, human resource, manufacturing, marketing and purchasing strategies that products require at each stage in the life cycle varies (Kotler and Keller, 2006). Whilst there is a common pattern to a product's life cycle, which is bell-shaped in nature, this pattern does vary depending on the specific characteristics of a given product. These life cycle patterns are illustrated and discussed in the subsequent section. 2. What are the main aspects of the product life cycle? The typical PLC consists of five main aspects: (1) product development; (2) introduction; (3) growth; (4) maturity; and (5) decline. In the diagram below, the respective sales (in red) and profits (in blue) across these five stages are illustrated. Figure 1 The PLC begins with product development, during which time the firm devises and creates...
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...THE VOLKSWAGEN NEW BEETLE [pic] MKTG Principles of Marketing TABLE OF CONTENTS Abstract Introduction Product concept Development of the Volkswagen New Beetle New Beetle adoption Marketing throughout the product life cycle Beetle brand Findings Conclusions Reference list Abstract *** “The Beetle is different, it makes you feel different. It is like a magnet”, - Volkswagen Chairman, Ferdinand Piech (Keith Naughton and Bill Vlasic, 1998) *** The present paper is the case study of the Volkswagen New Beetle from the marketing perspective. The thesis will analyze the product concept, and examine the New Beetle in terms of the concept in question. The purpose of the paper is to identify the issues in the application of theory with regard to the New Beetle as a product, describe the function and operation of this element of the marketing mix in Volkswagen, as well as to review the status of the identified issues in the reviewed company. The paper will consider the introduction of the New Beetle to the market and examine the respective phases of the product development. The thesis will also examine the adoption of the New Beetle as a product, overview the product lifecycle and the issues with regard to the Beetle brand. Overall, New Beetle is unique from other cars and can be the good example of the successful product development and adoption. The Beetle Brand is a successful brand that...
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...1 This is a report on a ideal product life cycle and its deviations from reality using the example of Volkswagen 2 Table of Contents Page 1. Introduction 2. The ideal product life cycle 2.1 Definition 2.2 Stages and characteristics 2.2.1 Market introduction stage 2.2.2 Growth stage 2.2.3 Maturity stage 2.2.4 Saturation and decline stage 3. Discrepancy between idealism and reality 3.1 Differences in product selection 3.2 Differences in duration 4. Conclusion 5. List of graphs 6. Reference section 1 1 1 2 3 3 4 4 5 5 6 7 8 8 3 2. Introduction The following report contains information about an ideal product life cycle and its characteristics unlike reality influences. It is an important part of managing marketing aspects and is classified as an economic basis of the instrumental marketing concept. Going back to the first models, Vernon, an American economist built up the theory that every product which is supplied to consumers changes in regard to the sales market and the productions function by passing different stages of lifetime (Kruber, 2008). Products such as other ephemeral objects or creatures take up a subordinate role to the cycle of life which remains to the process of life and death. They all go through similar stages of growth and decline until they disappear from the stage of life. Specific reasons for such a behavior of products include changes in population and hence resulting changes in demand. Other reasons to consider can be technological innovation and changes...
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...Product Life Cycle-------Nick Combs The concept of product life cycle concerns the life of a product in the market with respect to business/commercial costs and sales measures. The product life cycle proceeds through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life Cycle management makes three assumptions. They are: Products have a limited life and thus every product has life cycle. Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller. Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage. The product life cycle is broken down into 4 stages. The first is the market introduction phase. In this phase, cost are very high, there is very small competition, customers have to introduced to the product and there is very little profit. The second stage is the growth stage. Here, costs are reduced due to economies of sale, you begin to see a profit, consumers are aware of the product, there is more competition which leads to decreases in price. The third stage is the maturity stage. Costs are lowered as a result of production increasing and experience, increase in competitors in the market, and industrial profits start decreasing. The last stage is the saturation and decline stage. Here we have sales declining, profitability falls due to an abundance of competition and costs...
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...Product Life Cycle Description The Product Life Cycle is like a snapshot in time. Pick 3 of your favorite products and identify it's current Life Cycle Stage and the marketing activities they are using. Evaluate the applicability of their activities and the effectiveness of them. Provide recommendations for additional actions. 300 words Product life cycle is the concept according to which there are four phases a product goes through during its life. They are named as introduction, growth, maturity, and decline stages. In first stage of a product, the company normally does not earn profits. Since after the introduction, it takes a certain time for the people to know about the product. It is, however, dependent on the suitability of the way with which the company markets the product. The second stage is growth during which the product becomes pretty much popular, so more and more people tend to purchase it. During the third stage the revenue generated by the product reaches its culmination point. Beyond this point you may find the product demand gradually declining towards its end. Likewise, iPod touch is now viewed as in its final stage of product life cycle. Although, the company has taken a step by redesigning it but the sales are yet expected to be limited. One of the most reasonable suggestions for the company is to improve the product by adding more features. This will increase the possibility for the product to survive in the market. One of the most...
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...Life Cycle A product life cycle is a cycle that all products go through from introduction through demise and possible rebirth. There are five stages to the product life cycle: embryo, growth, maturity, decline, and although rare, rebirth. Each of the five stages is a mixture of product, pricing, distribution and promotion. The embryo stage aka introduction stage of the product life cycle is where a new product is launched into market. During this stage there is heavy marketing, product promotion, limited supply and sales are slow and difficult. Manufactures spend a lot to “educate” the public. In this stage the goal is to let people know of the new product and not primarily to make money. Electric cars and hybrids are definitely innovative and appealing. Consumers could not have known that gas was not the only way to fuel your car. Pass or play. Introduction was a success. In the growth stage, the market has accepted the product. Marketing efforts have boosted sales beyond original target market, therefore brand loyalty starts to build and sales increase, as do costs, including staffing. The good news is that profits increase because greater quantities are produced, lowering the cost per unit. The downside is current manufacturing facilities and equipment may not be able to keep up with demand. The Amazon kindle is currently in the growth stage. The idea of having hand-held technology larger than a smart phone but smaller than a full-sized tablet is new. ...
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...New-Product Development and Product Life-Cycle Strategies Based on: Philip Kotler et al., Principles of Marketing International Marketing Prof. Dr. Thomas Laukamm Objectives - Understand how companies find and develop newproduct ideas. - Learn the steps in the new-product development process. - Know the stages of the product life cycle. - Understand how marketing strategies change during the product’s life cycle. Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 1 Definition - New Product Development + Development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts. Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 2 New Product Development Strategy - New products can be obtained via acquisition or development. - New products suffer from high failure rates. - Several reasons account for failure. Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 3 New Product Development Strategy - New Product Development Process: + Stage 1: Idea Generation • Internal idea sources: R&D • External idea sources: Customers, competitors, distributors, suppliers Fach, Dozent, Semester International Marketing Prof. Dr. Thomas Laukamm 4 New Product Development Strategy - New Product Development Process: + Stage 2: Idea Screening • Product development costs increase substantially in later...
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...EBTD 4103 NEW PRODUCT DEVELOPMENT MATRICULATION NO. : 850919085881001 IDENTIFICATION NO. : 850919-08-5881 TELEPHONE NO. : 012-278 1322 E-MAIL : mnoridham@oum.edu.my LEARNING CENTRE : Shah Alam Learning Centre TABLE OF CONTENTS PAGE NUMBER 1. INTRODUCTION OF THE SELECTED COMPANY ................... 2 2. LITERATURE REVIEW ON THE VARIOUS STAGES IN A PRODUCT LIFE CYCLE …………………………………………………......... 3 3. ANALYSIS OF THE SELECTED PRODUCT ACCORDING TO THE STAGES IN THE PRODUCT LIFE CYCLE .......................................................................................... 5 4. RECOMMENDATIONS TO THE COMPANY ON HOW THE COMPETITIVENESS OF THE SELECTED PRODUCT CAN BE IMPROVED ................................. 8 5. CONCLUSION ......................................................................................... 8 6. REFERENCES ......................................................................................... 9 1. INTRODUCTION OF THE SELECTED COMPANY 1. The Nestlé company history The history begins back in 1866, when the first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company. In Vevey, Switzerland, our founder Henri Nestlé, a German pharmacist, launched his Farine lactée, a combination of cow’s milk, wheat flour and sugar, saving the life of a neighbor’s...
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...Product Life Cycle Stages Explained The product life cycle has 4 very clearly defined stages, each with its own characteristics that mean different things for business that are trying to manage the life cycle of their particular products. Introduction Stage – This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. On the other hand, the cost of things like research and development, consumer testing, and the marketing needed to launch the product can be very high, especially if it’s a competitive sector. Growth Stage – The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. This makes it possible for businesses to invest more money in the promotional activity to maximize the potential of this growth stage. Maturity Stage – During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up. This is probably the most competitive time for most products and businesses need to invest wisely in any marketing they undertake. They also need to consider any product modifications or improvements to the production process which might give them a competitive advantage. Decline Stage –...
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...Product Life Cycles Consist of Four Stages The Product Life Cycle | | If we plot a product’s sales over its life in the market place, the resulting curve looks much like the "S" shape curve depicted in Exhibit 1. This is the product's life cycle and it can be divided into four distinct stages: introduction, growth, maturity and decline. Introduction Stage Introduction begins when the product is first made available for commercial sale. During the introduction stage the product's sales are relatively low and slow to accumulate because it takes time to roll the product into multiple geographic markets, convince wholesalers and retailers to stock and sell the product, and to generate sufficient levels of customer awareness, interest, and trial. Overall, demand generally remains low during this stage. Growth Stage Eventually, as the product becomes more widely available and is adopted by more and more consumers, sales begin to grow at an increasing rate. It is at this point that the product has entered its growth stage. Sales continue to grow at an accelerated rate until the market approaches saturation i.e. the pool of potential customers for the product becomes depleted. As this saturation point is approached, the sales curve begins to tip over -- the rate of sales growth tends to decelerate. At this point, the product transitions into its third stage -- maturity. Maturity Stage Sales continue to grow during the first part of the maturity stage, although the growth...
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...New-Product Development and Product Life-Cycle Strategies 1) What are the two ways that a company can obtain new products? A) line extension and brand management B) internal development and brand management C) new-product development and acquisition D) service development and product extension E) market mix modification and research and development Answer: C Diff: 2 Page Ref: 258 Skill: Concept Objective: 9-1 2) Product improvements, product modifications, and original products can all be classified as ________. A) pioneer products B) new products C) product concepts D) product ideas E) test products Answer: B Diff: 1 Page Ref: 258 Skill: Concept Objective: 9-1 3) Which of the following is NOT a potential reason for a new product to fail? A) an underestimated market size B) a poorly designed product C) an incorrectly positioned product D) higher than anticipated costs of product development E) ineffective advertising Answer: A Diff: 2 Page Ref: 258 Skill: Concept Objective: 9-1 4) Which of the following is NOT a challenge presented by the product life cycle that a firm must face? A) All products eventually decline. B) Changing tastes, technologies, and competition affect the marketing of the product as it passes through lifecycle stages. C) A firm must be good at developing new products to replace aging ones. D) A firm must be good at adapting its marketing strategies. E) It is difficult to plot the stages as a product goes...
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...model for NPD: "The New Product Development Cycle" The NPD cycle is a circular arrangement of product development stages that result in the commercialization of new products. The stages for NPD consist of planning, design and prototype, production and pilot production, distribution, sales and marketing, and after sales servicing stages. Although there is a logical progression through the stages, after a product is developed, the cycle is continuous in order to promote improvement. Different phases of the projects rotate through the NPD cycle at the discretion of senior management. Planning Planning stages of NPD project are usually geared toward international business when feasible in order to increase geographical markets and market potential. With an increased market potential, the NPD investment decisions become more salable (Terpstra & Sarathy, 1991). Concept development occurs during the planning stages and includes new product and process ideas from many sources. Inputs from all areas of the organization, customers, noncustomers, suppliers and external research organizations are taken into consideration for new product concepts. The organization constantly expands its knowledge base and access to information to increase the number of new product and process ideas considered for development. Instituting procedures and incentives that encourage innovation and input from all parts of the organization continually increase the number of product concepts considered. ...
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...PRODUCT LIFE CYCLE Consumers purchase a magnitude of products every year however these products have a life cycle and so too will the Olay brand due to creation of demand for a more modern product thus P&G need to consider the Olay life cycle. There are 4 critical stages to consider: Introduction-This stage is deemed the most expensive when products are launched in new markets, sales is usually low due to the small target market initially until expansion to penetrate the market occurs. P&G has to consider various cost in this stage namely: consumer testing, Research and Development and initial marketing as well as purchase of machinery (3million) which is inevitably challenging and costly in a competitive sector such as Beauty. In the launch year it is visible that the NPV are low relative to year 2, 3 and 4 due to the lower customer base prior to growth initiatives being undertaken. We have a value of R2268219.99 Growth -This stage depicts exponential growth in sales due to extensive marketing such as the engagement in beauty consultants, media investment and sampling. P&G can also benefit from economies of scale in this stage which can assist in creating high profit margins to remain sustainable in the foreseeable future. An exponential amount of R11224128.26 is visible showing that the marketing strategies utilized increased sales. Maturity stage – At this stage we expect the Olay product to be well established in the market, however this stage also encompasses...
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