A1 The Product Life Cycle
The product life cycle refers to the stages a product goes through from its development and launch to withdrawal from the market. It is measured by the level of sales. Marketing activities change according to the stage of the life cycle a product is in.
Development is the stage before the launch. This is the stage where the product is being designed, prototyped and tested before a final product is decided upon. Marketing activities during this stage focus on market research to find out customer needs to support the product development.
Introduction is the initial stage when the product is launched. Promotional activities are high at this stage as customers need to be informed of the existence and benefits of the products. Examples include launch events and a large, omni-channel advertising campaigns.
Growth is the stage where sales begin to increase more rapidly. People are more aware of the product at this stage so promotional activities may switch to reminder rather than informative. Businesses may begin to make adaptations to other elements of the marketing mix such as reducing or increasing price depending on whether they used penetration or skimming at launch. They may increase the number of outlets their product is made available in and increase the range of the product available.
Maturity is the stage when sales are at their highest and growth slows down. At this stage there will be a lot of other competitors on the market. Marketing activities may begin to focus on the product benefits in comparison to competitors. Pricing is very competitive at this stage and businesses will be finding ways to tweak features to stand out from competitors.
Decline is the stage in which sales begin to fall. Firms need to make a decision to withdraw their products before they begin to make a loss or to use extension strategies to maintain high levels of sales.
Extension strategies include reducing the price of the product, targeting new markets, repositioning and rebranding.
