Exam 2 Marketing PLC

Intro Stage Marketing Objectives

Create product awareness and trial

fashion

Fashions pass through four stages: distinctiveness, emulation, mass fashion, and decline.

Concept of PLC See notes

Graphically this curve is bell shaped.

PLC 3 categories

Styles fashions fads

PLC has to assert 4 things

- Products have a limited life. - Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller. - Profits rise and fall at different stages of the product life cycle. - Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life-cycle stage.

Product Life Cycle

A company's positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle (PLC).

Maturity Stage Strategies

Diversify brands and item models, price product to match or beat competitors, build more intensive distribution, stress brand differences and benefits and encourage brand switching.

Intro Stage Marketing Strategies

Offer a basic product, Charge cost-plus, Build selective distribution, build product awareness and trial among early adopters and dealers.

Growth Stage Strategies

Offer product extensions/service and warranty, Price the product to penetrate the market, build intensive distribution, build awareness and interest in the mass market

Decline Stage Strategies

Phase out the weak products, cut the price of the product, go selective; phase out unprofitable distribution outlets, reduce to the minimal level communication needed to retain hardcore loyals.

Growth-slump-maturity pattern

Sales grow rapidly when the product is first introduced and then fall to a "petrified" level sustained by late adopters buying the product for the first time and early adopters replacing it.

style

a basic and distinctive mode of expression appearing in a field of human endeavor

Decline Stage Objective

educe spending (expenditure) and milk the brand.

Fads

fashions that come quickly into public view and decline quickly. Their acceptance cycle is short, and they tend to attract only a limited following who are searching for excitement or want to distinguish themselves from others.

Growth Stage Marketing Objective

for the growth stage is to maximize market share.

4 Stages of PLC

introduction growth maturity decline

Maturity Stage Objective

maximize profit while defending market share.

Introduction Stage

period of slow sales growth as the product is introduced in the market. Profits are nonexistent because of the heavy expenses of product introduction.

scalloped PLC

sales pass through a succession of life cycles based on the discovery of new-product characteristics, uses, or users.

Declining Stage

sales show a downward drift and profits erode. Sales decline, low cost per customer, declining profits, laggers make up the customers, there is a declining number of competitors.

cycle-recycle pattern

sales start declining, and another promotion push produces a second cycle (usually of smaller magnitude and duration

Growth Stage

there is a period of rapid market acceptance and substantial profit improvement.

Maturity Stage

there is a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition.