INTERNATIONAL PRODUCT LIFE CYCLE:

It is the life of product in the market with respect to business costs and
measures.
To say that a product has a life cycle assert four things:
Product has a limited life
Product passes through distinct stages, each posing different challenges,
opportunities, and problems to the seller.
Profit rise and fall at different stages of the product life cycle.
Product require different marketing, financial, manufacturing, purchasing,
and human resource strategies in stages of PLC.

FOUR MAIN STAGES:

Introduction
Growth
Maturity (Early maturity Late maturity)
Decline

INTRODUCTION STAGE:

Slow sales growth; offering of basic product

Limited distribution
Negative or low profits
Little or no competition
Customers have to be prompted to try the product ( awareness
creation)
Intensive personal selling to channel membership
Promotional expenditures are at their highest ratio to sales
Prices tend to be high because costs are high

Firms focus on those buyers who are most ready to buy

EXAMPLES:

Maruti alto 800

Sony xperia miro
Microsoft surface tablet

EARLY MATURITY:

costs reduced due to economies of scale

sales volume increases significantly
profitability begins to rise
public awareness increases
competition begins to increase with a few new players in
establishing market
increased competition leads to price decreases

EXAMPLES:

LED television
Online shopping
Prestige induction cookers

LATE MATURITY:

costs are lowered as a result of production volumes increasing and

experience curve effects

sales volume peaks and market saturation is reached

Industrial profits go down

increase in competitors entering the market

prices tend to drop due to the proliferation of competing products
brand differentiation and feature diversification is emphasized to
maintain or increase market share

EXAMPLES:
DECLINE STAGE:

costs become counter-optimal

sales volume decline
prices, profitability diminish
profit becomes more a challenge of production/distribution efficiency
than increased sales

EXAMPLES:
Dimensions of the International Product Mix

Product mix/portfolio:
The total number of products that a company offers its target
markets.
Product line:

All the brands the company offers in one product category.

Product length:
Total number of brands in the product mix.
Product width:
Total number of product lines the company offers to its target
international consumers.
Product depth:
Total number of different offerings in a product line .

New Product Development:

The new product development process consists of a series of activities
that firms employ in the complex process of delivering new products to
the market. Every new product will pass through a series of stages. These
stages are as follows.
Generating new product idea
Screening new product idea
Developing and evaluating new concept
Product business analysis
Designing/developing the product
Test marketing
Launching product internationally

Generating New Product Ideas:

Product and service based firms: firms focus on needs, wants, and desires
of consumers.
Technology firms: Focus is on research and development.
Sources of new ideas: Consumers, Competitive Analyses, Channel
Members, Employees, Top Management, Inventors, Consultants,
Researchers.

Screening Ideas:

USP /Superior consumer fit (needs and values)

Support senior management
Lucrative market potential
Defined brand strategy and promotional plan
Fit between product strategy and technological advantage
Likely trade adoption (retailers, supermarkets)
Usually a check list is developed in this stage

Developing & Evaluating Product Concepts:

Develop detailed description of product. Ask consumers to evaluate and
indicate willingness to buy.
Use:
Focus Groups

Conjoint Analysis

Performing a Product Business Analysis:

Estimate:
Project costs
Return on investment
Cash flow
Fixed/variable costs
The price level for the product!

Designing and Developing the Product:

Create prototypes
Create brand identity (name, logo, and packaging)
Marketing mix
Coordinate strategy across international subsidiaries
Product development is increasingly take place in emerging markets

Test Marketing:
Testing new product in limited area
Determine competitors.
Estimate expensive.
Time consuming.

Types of test marketing:

Simulated Test Marketing

Test marketing simulates purchase environment where samples of
target consumers are observed during the decision-making
process.
Controlled Test Marketing
Test marketing that involves offering a new product to a group of
stores and evaluating market reaction.
Actual test Marketing
Focus on cities appropriate for the test.
Involves selecting distributors and the additional marketing
infrastructure.
Most costly
Leaves the company most exposed to competitive sabotage.

Launching Product Internationally:

Introducing a new product to the international market:
Quality of launch:
High service quality.
On-time shipment.
Appropriate product availability.
Quality sales force and support.
Quality and amount of promotion.
Consumers and countries.

Timing of launch.
Marketing mix decisions.

Product Diffusion:
Product diffusion means speed of adoption of new product. After
launching new international product, product diffusion tells about the
products market share. Here are some factors who affect the product
diffusion.
Country market factors:
Cultural similarity
Economic similarity
Product factors:
USP (relative advantage)
Compatibility with adopters needs
Observability
Triability

Consumer adopters:
Innovators: (2.5% of the total market) Risk takers who can afford to pay
a higher price during the introduction stage.
Early adopters: (13.5% of the total market)
Consumers who purchase the product early in the lifecycle stage
and who tend to be opinion leaders in their community.
Early majority: (34% of the total).
Consumers who enjoy status of being among the first
to
purchase a popular product
Late majority: (34% of the total)
Consumers who adopt popular products when the risk associated
with them is minimal
Laggards: (16%)
The last consumers to adopt a product; they are risk averse and
conservative in their spending