You are required to critically study the relevance of the product life cycle for modern marketers. This evaluation must incorporate an application of the product life circuit to a product category, brand or firm of your choice.
In Marking this piece of work the next weightings apply:
Review of the literature on the product life routine with debate of the development of theories of the merchandise pattern to product life cycle and an evaluation of the assumptions within the product life circuit (50%)
Application of the books to a business of your decision and comment on the application of the product life pattern to product category, brand or firm (50%)
In writing the assignment you should consider this weighting program. You might find it helpful to structure your article to indicate this plan.
The Product Life Cycle
The product life routine is based upon the periodic desk of elements; it is the marketing comparative. (Smallwood, n. d. ) Corresponding to Smallwood, "it provides a platform for grouping products into households for easier predictions of reactions to various stimuli. With chemicals-it is a question of oxidation temperature and melting point; with products -it is marketing channel approval and advertising costs. Just like like chemicals react in similar ways, so do like products. The merchandise life cycle really helps to group the products into homogeneous individuals. "(Smallwood, n. d. )
The implementation of the merchandise life cycle is the main element factor for successful product management, whether it's the development of new products or the discarding of old non-profitable products. It is rather important for the user of this cycle to recognize the limitations that may be provided; therefore, allowing them to make alterations where needed. This routine uses qualitative terms and not quantitative conditions. (Smallwood, n. d. ) "The product life cycle helps an organization to comprehend and contextualize the actual growth prospects for the SBU and the tool implications. " (U of L, 2006)
There are four different phases that the merchandise life routine contains and each product should move through all four stages. These levels are:
The Introduction Level.
This is where the product is presented to the market. Usually the marketing perspective is focused and defines a identity for the product and encourages a higher level of consciousness.
The Growth Level.
This level shows a rise and sales and the competitive raises their efforts in order to "match" the merchandise. Some individuals are starting to make repeat buys of the merchandise.
At this level, the competition starts to leave the market and a reduction in sales can be noticed. Fundamentally, all that is kept is the faithful customers of the product.
Sales decline for several different reasons. The overall economy could be bad, new and much better products may be released, and much more which in the long run, impacts the sales earnings.
The above graph can be an example of the merchandise life routine time vs. revenue line.
As the merchandise progress through the different levels of the PLC, the price of the product changes as well. The price will change on the reputation and the demand of the product. For example, at the launch phase, depending on kind of product, it is usually centered at a cheaper price. As the demand rises during the development period, the demand increases and the purchase price may rise as well; however, after the demand is increased, equipment are purchased on a different level (variety purchasing is usually cheaper for the manufacturer); therefore, with cost per product decreased, the business actually can make a huge profit on the merchandise. On the maturity stage, the price is usually unsatisfactory because of the competition; therefore, no one's income on the merchandise is as good as it was in the prior periods. (Smallwood, 2010)
The product life routine is a robust planning tool; however, for this to be at its best one has to know how to put it to use through interpretation of the info that it offers and also through understanding the existing market and the consumer's manners through each stage of the PLC and they have to comprehend why these changes take place. (U of L, 2006)
"The PLC highlights the fact that conditions will change and that the product in
question might well expire unless careful planning for changes in online marketing strategy is undertaken. For instance, the PLC principle promotes the marketing planner to build up product advancements, or even totally new products, to protect the business against an early on demise of its market offering. " (U of L, 2006)
It is argued that each product goes through the product lifecycle. That is true; however, every product might not proceed through every stage of the merchandise life cycle. We will have a look at the non-public computer market. Apple, of course, was the first ever to introduce their home computer, so they released their product in the advantages stage. IBM adopted suit, only once they released their product it happened to be through the growth stage of the merchandise. Another computer company called NSR introduced their product at the maturity stage. Furthermore, the product/brand that has been introduced in to the market will have their own particular life routine. Careful learning of the PLC is essential, because what may be looked at the growth level could possibly only be considered a increase in sales for a short period of time. They have to take the info that the PLC provides based mostly after their own brand and make their decisions following that. Each company will more than likely follow a different route even although PLC for the merchandise that is being launched, in this example a personal computer, may show the same results for every single company. (U of L, 2006)
The introduction stage of the Apple I Pod began in 2001 when the product was released to the general public. It allowed consumers to download music, hundreds and even thousands of songs, and carry it with them at all times. The product was cutting edge. They have a modern design and are incredibly user-friendly. Produced and marketed by Apple, Inc, it captured the attention of many consumers round the world. The "buzz" was created and expansion of the product began to take off.
During the expansion stage, the demand and sales of the merchandise prolonged to increase as many consumers from around the world are now alert to the product. As sales continue steadily to increase, the competition also increases. A number of different companies have finally developed and released an identical competing product. Such companies include both Dell and Sony (as the most recognizable brands of the competition).
There have been several different Ipods released to the general public. Some are small and others are much larger. Apple is giving the consumers an assortment to choose from. Each product released also contained a different price tag. Usually, the greater features that the very good music player has, the more costly that it's; however, competition for the merchandise is actually launching lower priced devices, supplying Apple a "run because of their money"; however, has developed the Ipod on the platform. Which means that every time that the sales on the Ipod touch begin to decline or the recognition of the merchandise begins to decline, they create a new and superior version which gets all the "hype" restarted and once again the demand for the merchandise commences to increase.
At the maturity level of the formerly released Ipod, the demand for the product began to decrease. Considering that Apple sold over 140 million Ipods, the market was saturated. Apple needed to do something to keep the demand up. (Muller, 2008)
Before the decline stage contacted, Apple, because the Ipod device was built on the platform, decided to release a newer version of the Ipod touch that included cool features that would be appealing to the consumers. Since then, several other Ipods have been released, including the Ipod itouch and the Ipod shuffle. The demand for these products sent the Ipod touch back to the growth level of the merchandise life circuit.
I believe that the business used the information that the PLC provided to them in order to stay at the top in the field. Since the Ipod is the main reason Apple showed a rise in sales and income over the past few years, it is important that they keep carefully the "hype" heading if the business wants to stay in business. While they also offer products like the Apple pc and today the Ipad, these products aren't actually supporting the company in the manner that the Ipod device does.
Although Apple continues to produce a "circle" through the Ipods life circuit, it is because the life circuit of any product can be extended. The first version of the Ipod device began to show a reduction in sales; it could have been because the market was saturated or due to a decline throughout the market. But, with proper planning and use the PLC as an instrument, Apple was able to understand that the life span of their "backbone" for the business was coming to a finish and they needed to increase or increase the life routine of the product in order for the company to continue to see a rise in earnings. "In case the professional realizes that no corrective action is feasible, the target of attention will transfer away from the merchandise to how the elimination of the merchandise will impact upon the organization. " (U of L, 2006) They have this by developing the newer variants of the merchandise and creating, once more, the hype around the product, encouraging consumers to acquire their "latest technological" product.
One would think that once the new products were released that they might actually be in the first stage or the intro level of the PLC; however, this isn't true because the product is not actually new, it's just a much better and improved version of the ex - product. And, because of this, the new released variants of the Ipod touch started out in the progress stage instead of the introduction level of the PLC. Once Apple released the new variants of the Ipod touch, they actually extended the PLC life of the Ipod touch.
As long as Apple will keep developing newer, fascinating versions of the Ipod device, they will continue to make the group and the final level of the PLC will never be met; however, if they run out of ideas for expanding new and increased versions, the Ipod touch will then reach the decrease stage and the product will expire out.
Apple execs, during the maturity stage, used the perfect strategy of product changes in order to induce sales. With product modification, new features, new styles, and overall improvement of the initial Ipod touch were developed.
There are in fact two other strategies that they could have used. To get started with they could have tried the market changes strategy where they might draw in non users or make an effort to reach a more substantial marketplace; but, like earlier mentioned, they saturated the marketplace by advertising over 140 million devices (this will not count what the competitors sold once they introduced the competing devices). So, definitely, this strategy was out of the question. (Encyclopedia of Health Care Management, 2004)
The other strategy that professionals at Apple may have used is the marketing mixture modification strategy. With this plan they could have attempted "changing" things up to be able to increase sales. They would have lowered the purchase price, offered sales marketing promotions, increased distributions to a more substantial area, increased advertising, plus more; however, this plan would not have worked either. Apple already saturated the marketplace and their product was fundamentally open to anyone due to online Apple store. The efforts out of this strategy could have just been a waste material of time. (Encyclopedia of Health Care Management, 2004)
Once Apple realizes that removal of the Ipod is necessary, because it is the final stage of the PLC, there are a number of things that they can have a look at.
"withdrawing the merchandise immediately. No further production and no sell from inventory,
a poor withdrawal where production halts however the inventory is pushed through the circulation chain,
a phased withdrawal where the elimination of the merchandise is milked to maximize results. This often will involve changing the marketing combination strategy to reduce costs whilst wanting to increase returns from a main marketplace,
to sell the merchandise off to a competing company,
drop the merchandise from the typical range and reintroduce the product as a special product. " (U of L, 2006)
One thing to look into is that there have been products before that have experienced their complete PLC and were taken off the marketplace; however, the products have been reintroduced to the public and are now experiencing another go around of the PLC. For example, toys such as My Little Pony and Cabbage Patch Dolls were highly popular in the middle 1980s and in the past few years these were reintroduced to the public where they are now going through their second round of these Product Life Pattern.
The Product Life Pattern (PLC) is a superb marketing tool that should be taken advantage of when placing something on the marketplace for sale. By using this tool, marketers can better know how their product does and what needs to be done to keep the product "alive" and take full advantage of of the sales and earnings that the product brings into the company.
A marketing consultancy, to be able to use the PLC to its fullest potential, must understand a number of different aspects which may have an effect on the PLC and these aspects include things like the consumer's habit and the market/economy at that current point in time, among other activities. If they can do this correctly, they will be able to improve the life of the product through a variety of different ways, which were listed in this particular paper. They can either extend the life of the merchandise PLC by bringing out new and improved upon versions, they can change their marketing techniques, plus more; however, once the PLC implies that the product is in the final level, which is the decline stage, major decision will have to be made. Should the product be taken off the marketplace? If so, should it be achieved immediately or gradually in order to maximize income? Plus, there are a great many other questions that needs to be asked within this stage.
Apple provides a perfect example when one considers the Ipod product. The product was released to the marketplace, where it did not generate income for the company because of first development costs; but, after the product reached the growth stage and the demand of the product continued to go up, Apple commenced to make a large profit from the sales to the point that the Ipod touch product was considered to be the "backbone" of the business and placed Apple from having to close its gates and file individual bankruptcy. Realizing how important this product was with their business, after the market was saturated with this technology and the sales of the merchandise began to decrease, Apple knew that they had to do something and the only real rational choice, as shown in this newspaper, was that they redevelop the merchandise to add new and enjoyable features and technology that could once again place the Ipod into the growth level of the PLC and expand the life routine of the product through using the product adjustment strategy that was explained within this newspaper.