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MARKETING MANAGEMENT - Product Life Cycle

The Concept - Product Life Cycle

   Posted On :  18.06.2018 09:57 pm

The innovation of a new product and its degeneration into common products is termed as the life cycle of products is termed as the life cycle of products.

The Concept

The innovation of a new product and its degeneration into common products is termed as the life cycle of products is termed as the life cycle of products. There are five distinct stages in the life of products as shown below:



a. Introduction:

 
 
Research or engineering skill leads to product development. The product is put on the market; awareness and acceptance are minimal. There are high promotional costs.
 
When mobile phones came into market, the technology is new and prices were high. There was skepticism about the use of the product. Heavy promotion helped to increase sales.
 

b. Growth:

 
 
The product begins to make rapid sales gains because of the cumulative effects of begins to make rapid sales gains because of the cumulative effects of introductory promotion, distribution, and word of mouth influence. High and sharply rising profits may be witnessed. But to sustain growth, consumer satisfaction must be ensured at this stage.
 
In case of mobile phones the players like BSNL, Air tel, Idea, Hutch and others found growth in sales due to consumer awareness and fall in the tariffs. The prices of handsets manufactured by Nokia, Samsung, Motorola and others also came down with increase in demand.
 

c. Maturity:

 
 
Sales growth continues, but at a diminishing rate, because of the declining number of potential customers who remain unaware of the product or who have taken no action. Also, the last of the unsuccessful competing brands will probably withdraw from the market. For this reason, sales are likely to continue to rise while the customers for the withdrawn brands are mopped up by the survivors. There is no improvement in the product but changes in selling effort are common. Profit margins slip despite rising sales.
 
As technology progressed, ordinary mobiles may be out of market. Those with extra features like camera, internet facility and music player will become basic products.

 
 The following table shows the product life cycle and its different stages and the various characteristics, which they reflect, in the varying stages:



Source: Peter Dayle, “The Realities of the product life cycle”, Quarterly Review of marketing, summer 1976.
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