Chapter 8 Flashcards
Product Life Cycle
Describes the staged a new product goes through.
Length Varies depending on:
- industry, competition
- technological innovation
- approaches to marketing the product brands
Product life cycle phases
Introduction Phase
Growth Phase
Maturity Phase
Decline Phase
Introduction Phase
Start out small
Focussing on awareness
Hard to get their hands on. Trying to get it to review/influencers to promote
Ex. Generative ai is in this phase
Ex. iPhone. Price slimming strategy - prices very high then costs less when not as new (opposite to what uber did)
Growth Phase
Have a lot of demand
Sales start to rise quickly since they can ask for more money because of high demand
Ex. Uber. Started at below profit, charging low costs, now moved up to profit due to popularity and convenience able to charge more money for rides
Maturity Phase
Product and profit is stable
In a good competitive market place
Focusing on more price discounts and promotions so profit may fluctuate to compete with others.
Ex. Ride shared are just starting to meet this phase
Ex. Coca-Cola is 150 years old , and have been in their maturity for a very long time
Decline Phase
When other options have come into effect that are better
Can be a long decline throughout years , or a very quick decline
Not investing any resources during decline. Might extend product life cycle to end maturity and decline phase
Ex. Landline phones are in decline because of rise of cell phones . Will be a long decline throughout years.
High learning products
Takes time to reach its high potential
Ex. Learning to use an Apple Watch
Low learning products
Things that don’t require lots of learning
Stable products
Fashion products
Distrusts the transitional life cycle. They decline but then they come back to reach a second peak . Ex. Vinyls , retro interior design styles, Polaroids, etc.
Products who show creative self expression , fashion sense. Can come back into trends for a second wind
Once it comes back up it is no longer in decline and is in another stage
Fad products
Characterized by rapid growth , then rapidly declines.
Typically low learning product
Things that are not around as much anymore
Ex. Fidget spinners, memes, face masks during Covid
New product types
Minor innovation
Continuous innovation
Radical innovation
Minor innovation
Needs little consumer learning
Ex. Toothpaste
Continuous innovation
Needs moderate consumer learning
Ex. Dyson hair wrap, no blade fans
Radical innovation
Needs lots of learning
Ex. Google home mini, Apple Vision Pros, self driving cars
New product development
An expensive, time incentive, risky, effort intensive repetition jeopardizing venture full of opportunity costs
Different companies take different ways
Why do new products and services fail?
Insignificant point of difference
Incomplete new concept definition
Insufficient market attractiveness
Poor execution of marketing mix
Bad timing
Stages in the new market development process
- New product development strategy
- Idea generation
- Screening and evaluation
- Business analysis
- Development
- Test marketing
- Commercialization
4 P’s in Introduction stage of product life cycle
Price: skimming or penetration strategy
Place: limited distribution
Profit: minimal
Promotion: focus on building awareness with advertising
4 P’s in Growth stage of product life cycle
Price: prices are slowly reduced
Place: distribution is increases
Promotion: emphasize points of difference vs the competition
Profit: increased profits to reach their maximum
4 P’s in Maturity stage of product life cycle
Price: price discounts are used frequently
Place: full distribution is achieved
Promotion: focus on pricing and sales promotion
Profit: maximized profits that level off
4 P’s in Decline stage of product life cycle
Price: very low prices
Place: distribution is reduced
Promotion: only minimal promotion, if any
Profit: decreasing and minimal profits
Strategic approaches to growth/new product development (ansoffs aproaches to growth)
Current Products and Current Market = Market Penetration
Current Product and New Market = Market Development
New Product and New market = Diversification
New Product and Current Market = Product Development
Barriers to Adoption of a product
Usage - product doesn’t fit with existing habits
Value - no incentive to change
Risk - physical, social, economic
Psychological - culture, image, personality
