The Product Lifecycle •Just as humans go through life cycle, (baby to teenager to adult), most products (and services) pass through various stages over time. •These stages make up a life cycle of a product called Product Life Cycle. •Although the rates of change, and the length and intensity of each stage may vary, most product life cycles follow roughly the same pattern. The Product Lifecycle •In the introductory stages (similar baby stage) the focus is on the product. Later, the focus changes to promotion and price. Why do marketers need to know the product lifecycle? Product Introduction Often called a “ Launch” Consumers uninformed Branding 101 Intro 1st Consumers = “early adopters” (trendsetters) Can you think of any products that are in the launch phase now? Do a quick search! Growth Stage Followers to early adopters help drive increased sales. Competition is attracted. Product or service is managed carefully Wide advertising & distribution is common Branding, branding, branding! Maturity Flat growth No increase/decrease in sales New consumers replace those drawn to competitors Advertising keeps public aware maturity Decline Sales decreasing as customers move to new products Can be averted or delayed by advertising Any products? decline Decision Point Final stage in product life cycle Brand Management decision point !! Reformulate Decision / Repackage point “New & Improved” New promotion & repricing You have to make a decision whether you will let your product die or re-create your product. We finished here at slide 7 (previous slide) on Tuesday We are starting from slide #9 on Wed. Students handed in “Product Life Cycle assignment” at the end of today. (Wed) If you missed Wed class, you must bring a doctor’s note or your parent’s email; otherwise you will get zero on this assignment. Non Traditional Product Life Cycles Fad Niche Seasonal Fads: A product, which is popular only for a short time such as 6 months. A fad is said to "catch on" when the number of people adopting it begins to increase rapidly. The behavior will normally fade quickly once the perception of novelty is gone. Example: Silly band, Pet rock A product which is made and marketed for use in a small (specialized) but profitable market. Generally speaking, this market is so small that there are not too many competitors, so these products can last a long time. Blackberry is only for business professionals like CEO and lawyers. These products fluctuate a lot depending on the season. For example the salts you throw on the roads in winter, are perfect example. We use them a lot in winter time, but we rarely use them in other seasons. Your sales vary a lot, so your marketing activity also fluctuates a lot, depending on the season. We finished at slide 12 today (Wed) Are there steps to when we make a big ticket item purchase? Psychologists have proven that generally, consumers go through five (sometimes six) steps when making a purchase. This study goes hand in hand with understanding consumer psychology of WHY WE BUY. Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use. Need Recognition – The Consumer has a WANT Cultural, Social, Individual and Psychological Factors affect all steps Criteria is Set Information Search Evaluation of Alternatives Purchase When a current product isn’t performing properly This drives the entire buying decision cycle. When the consumer is running out of an product When another product seems superior to the one currently used • Are there ever times when we second guess our purchase decision? •The sixth and final step (in some cases) is….. REGRET! Cognitive Dissonance ? Did I make a good decision? Did I buy the right product? Did I get a good value? Chapter 5 Version 6e 19 Can minimize regret through: Effective Communication - Follow-up - Guarantees - Warranties Create a Google Doc and share it with me. Title it: Buying Decision – your name, ex: Buying Decision – Ms. Busteed Place yourself in the buying decision hotseat. Select an item that you would like to purchase (ie: car, vacation, donation, house). Go through the six steps of the Buying Decision process. In each step, include information necessary, ie: criteria for buying a car (colour, 4 door, low mileage, etc) When going shopping, do so online and include at least 2-3 links of items that fulfill your criteria! When selecting your final purchase, include a link and rationale as to why you selected this product in the end. Have fun shopping! When done, share with a friend!