product lifecyle
- Created by: Hetal M
- Created on: 10-05-17 17:06
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- product lifecycle
- product
- anything that can satisfy customer needs and wants
- considered most important part of the marketing mix
- five stages of a product lifecycle
- 1) devlopment
- complex and time consuming
- needs significant resources
- costs rise closer to introduction
- high failure rate
- test launch = reduce risk of product failure
- 2) introduction
- launching new product
- low level of sales
- penetration pricing could help rise demand
- low capacity utilisation = high unit costs
- negative cashflow
- distributors may be reluctant to take product on
- heavy promotion needed
- 3) growth
- fast growing sales = wider distribution
- recognised by the market = accepted
- positive cashflow
- market grows, profit rises, attracts new entrants
- 4) maturity
- slower sales growth = intense competition + fight for market share
- high level of capacity utilisation
- high market share = high profit
- positive cashflow
- weaker competition = entrants leave
- prices + profits fall
- 5) decline
- falling sales
- decline in profits and weaker cashflow
- more competitors leave
- decline in capacity utilisation
- 1) devlopment
- extending the product lifestyle
- lowering price
- changing promotion methods
- changing the product
- looking for alternative distribution channels
- developing a new market segment
- finding new uses for the product
- repositioning the product
- criticisms of the life cycle model
- shape and duration of cycle varies from different products.
- difficult to recognise where a product is in its lifecycle
- length cant be predicted
- decline is not inevitable
- product lifecycle can be used to...
- forecast future sales trends
- help with market targeting and positioning
- help analyse and manage the product portfolio
- product
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