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PRODUCT Life Cycle

Product Life Cycle

A new product progresses through a sequence of stages from introduction to growth, maturity, and decline.. ..impacting the marketing strategy and the marketing mix

Product Life Cycle

New-product strategy development

Idea Generation

Screening and Evaluation

Market Testing

Development

REV

Business Analysis

Commercialization

Stages in NPD
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Product Development

Profits are negative Sales are Zero

Investment Costs are high

Marketing Strategies: Introduction Stage


Sales Low sales

Costs
Profits
Marketing Objectives

High cost per customer


Negative
Create product awareness and trial

Product Price Distribution Advertising

Offer a basic product Use cost-plus basis Build selective distribution


Build awareness among innovators, early adopters

Toyota Hybrid : Introductory stage product

Marketing Strategies: Growth Stage


Sales
Costs
Rapidly rising sales

Average cost per customer


Rising profits Maximize market share Offer product extensions, service, warranty Penetration Pricing Build intensive distribution Build awareness in the mass market

Profits
Marketing Objectives

Product Price

Distribution Advertising

A Product at the Growth Stage

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Marketing Strategies: Maturity Stage


Sales
Costs
Peak sales

Low cost per customer


High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits

Profits
Marketing Objectives

Product Price

Distribution Advertising

A product at the Mature Stage

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Marketing Strategies: Decline Stage


Sales Costs
Declining sales

Low cost per customer


Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Go selective: phase out unprofitable outlets

Profits
Marketing Objectives

Product Price Distribution

Advertising

Reduce to level needed to retain hard-core loyal customers

Alternative product life cycles

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Apple Inc. 2008 Revenues


iPod

6% 7% 10%

5%
28%

Portables Desktops Other Music Related Products and Services Software, Service, and Other Net Sales

17% 27%

iPhone and Related Products and Services Peripherals and Other Hardware

http://www.marketlineinfo.com/library/DisplayContent.aspx?R=5B0A0C20-9BB6-4284-A575-AC0F2261F45C&N=4294839864

Product Life Cycle of iPods


iPod Classic (Oct 2001)
iPod Touch (Sept 2007)

iPod Shuffle (Jan 2005)

iPod Nano (Sept 2005)

http://www.apple.com/ca/ipod/compare-ipod-models/

Timeline of iPod Classic

http://en.wikipedia.org/wiki/IPod_Classic http://www.apple.com/ipodclassic/

Timeline of iPod Classic

http://en.wikipedia.org/wiki/IPod_Classic

Timeline of iPod Touch

http://en.wikipedia.org/wiki/IPod_Touch http://www.apple.com/ipodtouch/

Marketing Mix -- iPod Touch

Product: A great pocket computer. Music,

movies, games, apps at fingertips. HD Video recording, Retina Display, Air play, Voice Control features. Price: 8GB : $199; 32GB: $299; 64GB: $399 Promotion: Advertisement on TV, billboards, magazines. Focus on numerous applications. Place: Online, Apple Store, Future Shop, Best http://www.apple.com/ipod/compare-ipod-models/ Buy, Costco.

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