Product Life Cycle (PLC) Flashcards
Product Life Cycle (PLC)
The demand for a G&S can never last forever
The PLC describes the changes in consumer demand of a G&S over time
The PLC helps marketers determine how to promote their G&S
Introduction Phase
Launch of a new G&S is very expensive (design costs, training personnel, advertising, distribution, packaging etc)
Thus, the initial price of a product when it enters the market is usually very high
Early adopters: adventurous consumers who like to be first to own new products
Example: DVD players cost $600 in 1997
Growth Phase
Growing sales as product becomes more familiar from advertising & word of mouth
This is a critical time for the product - there’s a risk of busting
Competitors entering the market → price falling
Market Share: how much of the market you control compared to competitor
Example: Electric Cars
Maturity Phase
Sales growth slows → profits remain
Costs have been recovered for research, production, distribution, sales and advertising.
Market is full of competitors, market share is stable, and price of product is low.
Examples: toilet paper, ketchup, milk, fridge
Decline Phase
Sales and profits begin to decrease
Marketers try to adjust/improve/modify product or reduce price to reverse decline (add features).
Eventually product is removed from market.
Fad
a product or service that is VERY popular for a SHORT time, and then disappears (i.e. Rubik’s Cubes, Pokemon Cards)
Trends
more lasting effect on the market than a fad
Ex: move towards healthier lifestyles, Reality TV
Niche Market:
firms that control and dominate a very small, specific section of the market
Ex: Pet Hotel
Seasonal Market:
G&S only popular during particular seasons
Ex: ice cream → summer OR skiing → winter
Brands with multicoloured logos often want to communicate that they are:
Multidisciplinary
Playful
Fun
Consumer Profiles
PRODUCT – use the most appealing colours, materials, and other features for the target market.
PLACE – how to best deliver the G&S
PRICE – how much they are willing to spend
PROMOTION – how to create meaningful messages
– knowing which media is used (i.e. TV station)
EX: BABY BOOMERS (Born after WWII)
Market Segmentation
To define their ideal customers and describe a customer profile, marketers divide the market based on:
Demographics
Geographics
Psychographics
Behaviour
Demographics
Study of obvious characteristics that categorize people.
Age (tweens)
Gender (male / female)
Family Life Cycle (student / married / retired)
Income Level (below $20,000 / $100,000 +)
Ethnicity & Culture (white wedding gowns in China)
Geographics
URBAN
Apartment or condo dwellers (DINKS)
Go to cultural events, restaurants & public transport
Live close to work & dress well
SUBURBAN
Own cars and drive to work
Spend money on gardens, BBQs
Have children
RURAL
Probably own truck / SUV
Own a large piece of land
Enjoy outdoors and have pets
Psychographics
Religious beliefs
Lifestyle (i.e. exercise lovers also eat healthy)
Preferences
Attitudes
Personality traits
Hobbies
Political beliefs (i.e. socialist vs. capitalist)
Behaviour
Includes grouping consumers based on:
Their purchase behaviour
Benefits sought when purchasing something
How and when this group uses your product
How often they use your product
How Frequently Does the Consumer Use the Product?
Heavy Users
Medium & Light Users:
Non-users:
