Impact of Product Life Cycle on Marketing Decisions
Project #3 :: She Sells Cell Phones at the Cell Store
Product Life Cycle
 The marketing theory that a product moves through different stages of life from its birth
to its death
 Stages: introduction, growth, maturity, decline
 Marketing decisions impact each stage of the product life cycle
Introduction
 A product is introduced to the market, and usually, sales growth is slow
 Early adopters, or innovators, are the primary buyers of the product or brand
Growth
 The product is growing up, and sales are quickly increasing
 Copycat products are hitting the market, so competition is building
 Early adopters continue to buy the product and are joined by followers
Maturity
 The product can be compared to adulthood
 Sales are steady
 Competition is probably the fiercest
 It’s becoming difficult to tell the differences among competing products
 The supply of the product now exceeds demand
Decline
 This stage could be considered its golden years
 Product sales decrease due to shifts in consumer preference or technological innovations
 The only way to make money on the product is to sell large volumes since prices have
been cut so much
 Eventually, the product may need to be removed from the market
Pricing Decisions
 What price will we charge?
 Introductory stage: prices are set high to recover investment in the product; there are
few to no competitors
 Growth stage: prices are lowered to attract customers and compete with copycat
products
 Maturity stage: prices are stabilized to maintain market share
 Decline: prices are lowered to get rid of stock on hand
Promotion Decisions
 Introductory stage: the level of promotion is high with the intent being to “get the
word out” about the product so that customers know about its existence and features;
the business promotes the product to its channel members to get them to carry the
product
 Growth stage: the level of promotion remains high or increases, but its focus shifts to
persuading customers of its benefits over those of the competition
 Maturity stage: the level of promotion is steady with funds directed to advertising and
sales promotion to remind customers about the product or brand
 Decline: the level of promotion is reduced and eventually trails off
Place Decisions
 Where will the product be offered?
 Introductory stage: efforts are made to get good channel members to offer the
product; the business may offer exclusive distribution rights
 Growth stage: the business increases the number of distribution outlets
 Maturity stage: the business works on building intensive distribution – getting the
product in as many outlets as possible
 Decline: the business alters or gets rid of the product; manufacturers drop the product
from their offerings
Product Decisions
 What assortment of products will be offered?
 Introductory stage: the business offers a basic product
 Growth stage: the business increases its assortment of products and offers new
features and models
 Maturity stage: the business modifies the product to appeal to new customers
 Decline: the business alters or gets rid of the product; manufacturers drop the product
from their offerings
Extend a Product’s Life Cycle
 Product modifications are used to extend the life of the products
 This entails changing product quality or packaging
Modify the Market
 Businesses also modify their markets by increasing the frequency with which present
customers use the product, by finding new customers, or by creating new uses for the
product