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Product Life Cycle
Business Studies
(A Level)
For marketing to be effective, a business must be aware of
it’s product life cycle. The cycle shows the stages that the
pr...
The product is researched and designed.
Suitable ideas must be investigated,
developed and tested
A prototype or model of ...
The product is launched.
As the product is new, sales are usually slow
There is a high cost of promotion and distribution ...
Sales begin to grow rapidly.
Repeat purchases
Customers are more aware of the product
Production increases, costs fail
Pro...
Growth in sales may start to level off
Product established with a stable market
share
Sales peaked
Competitors have entere...
Sales start to decline.
Sales often decline due to change in
consumer tastes and/or new products
Products lose their appea...
It would be sensible for a business to start to extend the product’s
life cycle in the maturity stage before sales fall in...
Firms may use extension
strategies to increase
product life cycle.
An extension strategy is a practice
used to increase th...
Illustrate broad trends
Identify points to consider launching new
products, older ones are in decline
Identify points for ...
Advantages Disadvantages
• Give managers the ability to
forecast product direction and
plan for timely execution of
relati...
Why is the product life cycle an
important concept in marketing?
The product life cycle is an important concept in marketi...
Product Life Cycle (Stages and Extension Strategies)
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Product Life Cycle (Stages and Extension Strategies)

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Business Studies - Product Life Cycle
The product life cycle stages are explained in depth along with advantages and disadvantages of the product life cycle, extension strategies and the uses. Each stage (development, introduction, growth, maturity and saturation, decline, rejuvenation and decline) are all explained in depth along with a chart and adv. and disadv.

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Product Life Cycle (Stages and Extension Strategies)

  1. 1. Product Life Cycle Business Studies (A Level)
  2. 2. For marketing to be effective, a business must be aware of it’s product life cycle. The cycle shows the stages that the product will pass and the sales that can be expected. Development Introduction Growth Maturity (and Saturation) Decline Rejuvenatio n or Termination
  3. 3. The product is researched and designed. Suitable ideas must be investigated, developed and tested A prototype or model of the product may be produced Decisions are made about the launch A large number of the products fail and don’t progress further, due to business being reluctant to risks of new products There are high costs and lots of spending with no sales or revenue.
  4. 4. The product is launched. As the product is new, sales are usually slow There is a high cost of promotion and distribution to make consumers aware of the product Product may not be profitable Prices may be set high to cover costs Prices may be set low to break into the market Sales may be restricted to early adopters, people will pay high prices for new fashion trends and technology rather than when they’ve gone out of fashion Fast moving consumer goods may enjoy this type of start to the cycle
  5. 5. Sales begin to grow rapidly. Repeat purchases Customers are more aware of the product Production increases, costs fail Product becomes profitable If it’s a new product, there are rapid growth sales and competitors may launch their own versions of the product (copycat products) which may slow down sales Price and promotion need to be considered
  6. 6. Growth in sales may start to level off Product established with a stable market share Sales peaked Competitors have entered the market to take advantage of the product profits New competitors Some firms are forced out of the market
  7. 7. Sales start to decline. Sales often decline due to change in consumer tastes and/or new products Products lose their appeal to consumers Eventually, the product is withdrawn or sold to another business
  8. 8. It would be sensible for a business to start to extend the product’s life cycle in the maturity stage before sales fall into decline. Successful extension strategies can transform the position in the market place. Rejuvenation – Extension strategies are used Termination – Product is taken off the market
  9. 9. Firms may use extension strategies to increase product life cycle. An extension strategy is a practice used to increase the market share for a given product or service and thus keep it in the maturity stage of the life cycle rather than going into decline. Repositioning Relaunching ‘Now With’ policy New version of the product Develop new product range Launch to new market Updating appearance New packaging Change components or ingredients Encourage people to use the product more Advertising Price reduction New uses
  10. 10. Illustrate broad trends Identify points to consider launching new products, older ones are in decline Identify points for extension strategies to be introduced Help identify if, when and where spending is required Identify when products should no longer be sold Manage product portfolio Indication of profitability at each stage Plan different styles of marketing needed Predict future sales Determine decisions
  11. 11. Advantages Disadvantages • Give managers the ability to forecast product direction and plan for timely execution of relative competitive moves • Difficult to foresee transitions • Helps to formulate marketing mix decisions • Difficult to determine what stage the product is in • Explanatory tool • Not all products go through every stage • Determine when it’s reasonable to eliminate declining products • Products may remain in stage for a long time • Effectively, only one product per diagram • Inefficient when dealing with Brands and/or services
  12. 12. Why is the product life cycle an important concept in marketing? The product life cycle is an important concept in marketing because it describes the stages a product goes through from when it was first thought of until it is finally removed from the market. Not all products reach the final stage, some continue and some rise and fall.

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