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Review for ets exam…
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| bet | 23/48 | | Sana | 24.03.2021 | | Hajmi | 292 Kb. | | #13438 | | Turi | Review |
Product Life Cycle
Popularized by Theodore Levitt, 1965
PLC can be applied to:
product category (Watch)
product style (Digital)
a product item/brand (Timex)
Four Stages to the Product Life Cycle:
Introduction
Growth
Maturity
Decline
The following material refers to the PLC as far as the product category is concerned unless otherwise stated.
Introduction
Failure rate for new products can range from 60%-90%, depending on the industry. A product does not have to be an entirely new product, can be a new model (car), a new product for the company, or repositioning a product to a new market.
Marketing Mix (MM) considerations
Need to build channels of distribution/selective distribution
Dealers offered promotional assistance to support the product...PUSH strategy.
Develop primary demand/pioneering information, communications should stress the benefits of the product to the consumer, as opposed to the brand name of the particular product, since there will be little competition at this stage and you need to educate consumers of the product's benefits.
Price skimming...set a high price in order to recover developmental costs as soon as possible.
Price penetration...set a low price in order to avoid encouraging competitors to enter the market, also helps increase demand and therefore allows the company to take advantage of economies of scale.
Growth
Need to encourage strong brand loyalty; competitors are entering the market place. Profits begin to decline late in the growth stage.
May need to pursue further segmentation.
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