What is Product Lifecycle Management?
Simply put, product lifecycle management is the process of actively managing the creation, sale, and obsolescence of a product, service or business model over a set period.
What this means is that you should be forecasting a product’s obsolescence even as you work to bring it to market. That doesn’t mean picking an arbitrary date to phase out your new product, regardless of market conditions. But it does mean making an educated guess about the timing for a product’s possible obsolescence and proactively assessing the product in advance so that your company has ample time to plan for an updated version or replacement product before it’s too late.
Introduction Stage
During the introduction stage, a product is new and unknown to consumers. It is necessary, therefore, to use an active strategy to win over new customers.
- Copy and paste your USP from the Product Assignment for Q1.
- Copy and paste your profile completed from your Market Assignment for Q2.
- Where have you positioned your product relative to your competitors? Indicate H/M/L, and the Introductory price.
- Promotion is focused on Introduction of your product…you do not have to identify anything for this question.
- Where are you going to distribute your product? State, city, and the type of store if a product. If a service, State, city, and the zip codes you are servicing and business if necessary.
Growth Stage
During the growth stage of the product life cycle, products become better known to the public. Consequently, it is not necessary to expend as much effort and resources on developing product awareness. Promotion is focused on conviction or communicating a reason to purchase. Firms also benefit, during this stage, from increased production levels, which results in economies of scale. During this stage, price competition is an important component of a marketing strategy. Your product sales are growing as demand increases, so you will want to raise price and focus your strategy on promotion to purchase.
- You created eight value features in the Product Assignment and used four in your USP. Choose two new value features from the four you did not use and describe them here.
- Expand your profile to include a different age group with different activities, interest, and opinions. Choose three different AIO’s and copy them here.
- As mentioned above, you will want to raise price. In real life, we must analyze competition and other factors to determine a higher price. Your new price must be relative to the value offered with the two new value features. The purpose is to expand your market by attracting those who were not introduction stage customers. We are marketing to the fringe to grow our sales. Provide me with the new price you are offering, and the increased value in one sentence.
- Promotion is focused on growth of your product…you do not have to identify anything for this question.
- Identify the new places you will distribute your product as you are seeking to grow. State, city, and the type of store if a product. If a service, State, city, and the zip codes you are servicing and business if necessary.
Maturity Stage
The maturity stage of the product life cycle occurs when the market becomes saturated. At this point, production costs are further reduced through economies of scale and experience, but competition leads to a significant reduction in profits throughout the industry. There are two strategies typically employed in order to maintain profitability during the maturity stage; firms can either differentiate their brand through marketing or introduce new features to the existing product.
- Create one new use for your product. Each spring you will notice that Wishbone Italian Salad Dressing is advertised as a sauce to marinate meat when barbecuing.
- Expand your market further to include new age group, location, and AIO.
- Your pricing strategy becomes complex as you will lower the price for your new markets as an introductory price, however you will keep your price the same for maturity. Use the price from the growth stage as the template to reduce price for your expanded market. Provide the price from the growth state, and the new lower price.
- Promotion is heavy as you are expanding your communication to introduce your product to a new market, at the same time you are communicating to keep your present customers.
- You are again expanding your distribution. Include a new state, zip code, and new type of store to increase sales.
Decline Stage
At the decline stage, sales either decrease or stabilize. We have discussed Budweiser as the King of Beers as their sales continue to decline. The cash that comes from Bud provides resources to develop NEW PRODUCTS. If demand decreases, this will, typically, result in significantly lower price margins, often making it impossible to make profits from the product. At this point, firms that cannot make profits will usually discontinue their product and focus their efforts on other offerings. Firms that can produce the product at a profit will normally market them as a commodity, spending little on marketing and pulling in small profits on slight margins.
No information is required for the Decline stage as our role as Product Manager’s is to keep selling the product as long as the ROI is greater than the opportunity costs for other investments. If you decide to phase-out your product, you must communicate effectively an alternative to the displaced product.
RUBRIC
Fifty points (50)
- 40 points for your creativity answering all required
- 10 points for following instructions