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Slide 14.1

New-product development and productlife-cycle strategies

Chapter 14

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Slide 14.25The product life-cycle

The product life-cycle (PLC) is the course of a

products sales and profits over its lifetime. It

involves five stages:

Product development

Introduction

Growth

Maturity

Decline

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Slide 14.26

Figure 14.2Sales and profits over the products life from inception to demise

The product life cycle

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Slide 14.27The PLC as an effective marketing tool

The PLC can be applied to product classes as

well as styles, fashions and fads.

The PLC will reflect these aspects in the

length and type of PLC as illustrated:

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Slide 14.28

Figure 14.3 Marketers need to understand and predict style, fashion and fad

The PLC as an illustrator

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Slide 14.29Product / concept development stage

Product concept converted into meaningful

consumer terms of a product image.

Concept tested to ascertain commercial

appeal.

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Slide 14.30Introduction stage

The phase where the new product is

distributed and made available for purchase.

The market pioneer has much responsibility

when devising the appropriate strategy as itsets the stage for the products introduction to

the consumer.

Characterised by high promotional costs.

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Slide 14.31Introduction stage strategies

Strategies are based upon the product and the

dynamics of the market

Skim the market slowly using high price and

relatively low promotional activity. Skim rapidly by using a high price and high

promotion strategy if the market is price insensitive.

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Slide 14.32Growth stage

The product sales begin to increase rapidly.

Profit is generated as a result of effective

promotional activity and the spread of costs

over larger volume of sales.

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Slide 14.33Maturity stage

The phase where sales growth slows or levels

off.

Marketers then seek to extend the life of the

brand by the following methods; New market development

New usage and application

Product development and modification

Marketing innovation

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Slide 14.34Decline stage

Sales decline.

Marketers need to determine the value of

retaining the product versus the cost of

divesting from the product. This is weighed up against the market

dynamics.

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Slide 14.35

Table 14.2 Summary of product life-cycle characteristics, objectives and strategiesSource: Philip Kotler, Marketing Management: Analysis, planning, implementation, and control, 11th edn, 2003, p. 340. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ.