Product life cycle and its stages Essay

In todays world, where commercialize is unpredict adequate to(p), strategies play essential role in defending a fasts harvest position. The main reason why companies must continually develop brisk overlaps is beca commit harvest-homes confine carriage daily round, (Bittel, 1980). Just as operation managers must be prep ard to develop raw harvest- convictions, they must as well as be prep ard to develop strategies for both young and alert crossways. First and foremost, in the first place proceeding into the harvest-tide aliveness cycle strategies, lets define what a crossing sustenance cycle is. According to Griffin and Ebert (2002), a crop tone cycle is a series of stages through which it passes during its profit -producing life. Depending on the results ability to get out and keep customers over time, a yield life cycle snow-whitethorn be a matter of months, years, or even decades. Anyway, there atomic number 18 four strains that every crop undergoes in a commercialize since it was produced and launched to its out-of grocery store position. They be the introductory, growth, maturity date and subside microscope stages. to a unhopefuler place fol kickoffs the figure of a growth life cycle and all phases detail descriptions shall be described later.Also, considerations must be given to how far the fruit is along the product life cycle. A new concept / product besides foundation garment the product life cycle whitethorn pick out intensive distribution to flummox with to launch it on to the market. As it becomes much established, perhaps the after gross revenue-service will play a more essential role which leads to a more selective distribution, with only those dealers that are able to offer the necessary standard of after sales-service being allowed to sell the product. In simpler words, in every phase of a product life cycle, a product should undergo different, suitable dodge in order to verification competitiv e in the ever changing market.Below follows the product life cycle stages along with their definitions and beneficial strategiesIntroductory StageAccording to Stevenson (1999), the creation stage begins when a productreaches the market place. When an item is first introduced, it may be treated with curiosity by the buyers. Demand is generally low as buyers are not yet familiar with that item. This often leads to the eject of the products price. Therefore, along with time, payoff and design improvements, many new products became more reliable, less costly, and too the increase in awareness in buyers lads to the increase in aim. Also, according to Griffin and Ebert (2002), during this stage, marketers focus on make their target markets aware of the products and their benefits.Also, during this stage, the particular product is represented with innovation (diffusion of innovative curve), product development (Ansoff Growth Matrix) and problem children (Boston Consulting Group). Among the common characteristics, according to metalworker et al 1997 are new products low sales low market share Specific type of customers willing to buy new products.During this phase, as compared to the new(prenominal) phases, profits are negative or low because of low sales and high up distribution and promotional expenses. Promotional expenditures are high as the partnership is eager to inform customers about the products availability and get them to try it. Since the market is not ready for new products at this stage, the firm focuses on selling such items to those who are the readiest to buy.A smart set that wishes to be a market leader for its product must choose to launch a strategy that is consistent with the intended product positioning. The company, when deciding on which strategy to implement for the products long-term, life and will have to continuously formulate new pricing, promotion and another(prenominal) marketing strategies.Growth StageIt is the second st age of product life cycle process. Only if the new product satisfies the markets demand and need, it will enter this stage. According to Heizer and Render (2001), in the growth phase, product design has begun to stabilize, and in effect(p) forecasting of capacity requirements is necessary. Adding capacity or enhancing existing capacity to accommodate the increase in product demand may be necessary. Also, customers who have tried the product earlier may stick loyal. In the face of such opportunity, new competitors will start entering the market and they will introduce new product features and hence, expanding the market, leaving the products price constant or fall slightly.Here, a company, in order to stay competitive in the market, should keep on promoting its product. In addition, profits start to increase. The firm has several strategies to stay in the speedy growing market as long as possible. Also, the firm improves the product quality, adds more distribution channels, changin g the advertizement theme from promoting the product to the market to reminding the market on the availability of the product as well as to increase awareness. The firm also unhorses the price in order to attract more buyers.During this stage, usually firms that have successfully passed their products introduction stage have high market share and are highly profitable. On the whole, as s sanction by Smith et al 1997, this phase is represented by sales and profits growth more general usage development of the market high market share change magnitude competition.Maturity StageThe third stage for a product to go. As stated by Pride et al, (1988), sales are still change magnitude at the beginning of the maturity stage, but the rate of increase has wearisomeed. later on in this stage, the sales curve peaks and begins to descend. Many products maturity stages lasted longer than the precedent stages. Industry profits decline throughout this stage. During this stage, sales growth starts to slow ingest. Hence, the firm as well as its market competitors starts lowering subdue their prices, increases advertising and sales promotions. Also, the intense market led weaker competitors to quit. Only those unfluctuating enough will be able to precede the competition.A company should consider a different strategy when its product cines ti maturity, each by redesigning the market or its product. Modifying market is when the company tries to increase manipulation if the current product. The currently matured product provide also be redesigned its package or style. It is an effective way of strengthening a firms market share. Consumers may also be encouraged to use the product more often or in new ways. price strategies are flexible during this stage, such as markdowns pr price incentives. Marketers may offer incentives and services to declare offering such matured products, especially from competitors. Sales promotions and aggressive personal selling can e effecti ve during this period, when competition may require large promotional expenditures.On the whole, just as adopted from Smith et al (1997), this phase is represented by market maturity and a slow-down in sales growth transformation of late majority of customers, and trying to increase market penetration and share. defy StageThe final stage of the product life cycle. According to Lancaster and contact (1994), it is when sales begin to fall and already slim profit margins are depressed even further. Customers have begun to become bored with the product and are expression forward to newer, latest products. Dealers begin to de-stock the product in expected value of reduced sales. Here, sales and profits sank lower, due to various reasons such as advancement in technology, shifts in consumer tastes or intense competitions. Such factors have forced many companies to quit the market and for the other remaining companies, they may have to redesign their strategies to stay longer in the ma rket by raising the price to cover cists, re price to maintain market share, or lower the price to reduce inventory.The firm can also cut down or tighten the products advertising and promotional budget so it will be easier for the company to lower down the price. In addition, the company can also downsize its market and focuses on smaller segment as well as their trade channels. In other words, distribution of the declining product will be narrowed to te most profitable existing market. Also, the product will not be highly promoted, although advertising and promotions may be used to slow down the decline. Instead, the firm may even decide to drop the product unaccompanied at the end.Just like the supra three phases, this stage is also represented by declining sales and profits rationalism in the market through mergers, acquisitions and take-over some products will be milked for the profits often products may need to be harvested and in a few cases, product extensions can be develo ped.Detecting Maturity and DeclineThe need in strategy development is to detect changes in the trend ofindustry sales, to detect when the product life cycle will enter a new phase, (Asker, 1984). In other word, it is very essential for a firm to put one over and analyze all market factors involved when its products growth phase of the product life cycle changes to a flat maturity phase and when the maturity phase changes into a decline phase. Below are some factors that supply as market indicators that serve as an aid for a firm in detecting its product maturity and decline Price pressures caused by overcapacity and the lack of product differentiation As the product matures. Buyers have become familiar with the related product and hence, they are noncompliant to pay finest price for the product in order to obtain firebrand security Technology advancement and substitute products may lead to the decline of a product. A suitable example for this case is the black and white televisio n sets which due to technological development have lead to the production of color televisions a definite unpredictable effect on sales of black and white television sets When the number of potential first time buyers for a particular product decreases, the market along with the company sales and profits happen to decline The market is fully penetrated and there are no sources of growth from existing and new users and Existing customers may start to be disinterested in the product and are probably looking forward to switch brands.Actually a product life cycle is conceptually simple yet powerful. However, it is not easy applied. The stages described above are not easily forecasted or predicted or even easily determined. Furthermore, it is difficult to determine and analyze the product definition and finally, evenif the stages in the life cycle are determined, the strategy implications are not evermore obvious.Therefore, on the whole, I would like to conclude that a company should be aware of the life cycle stages of each product it is responsible for. The company should also predict on how long the product is expected to mill in that stage. Such thinking is very important for setting up strategies such as let say, if the product is expected to remain the maturity stage for a long time a replacement product might be introduced later in the maturity stage. On the other hand, if the maturity stage is expected to be short, however, a new product should be introduced much earlier.