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Product lifecycles
Product lifecycles
*Some versions of product life cycles add a fifth category at the beginning which takes into account the development of the product, but it is generally accepted that there are four main categories;
Introduction -
Researching, developing and then launching the product
Growth -
This is when sales are increasing at their fastest rate
Maturity -
Sales are near their highest, but the rate of growth is slowing down, e.g. new competitors in market or saturation
Decline -
Final stage of the cycle, when sales begin to fall and extension strategies are considered and introduced.
Unlike the ‘cradle to grave’ life cycle of a product, life cycle in marketing terms refers to the life of a product within the retail environment.
The diagram below shows a typical life cycle of a product and the four main stages from which we can deduce its ‘life’.
'Cradle-to-grave' assessment considers impacts at each stage of a product's life-cycle, from the time natural resources are extracted from the ground and processed through each subsequent stage of manufacturing, transportation, product use, and ultimately, disposal.
1.Introduction: Initial research into the market results in a new product which is developed, prototyped and then launched as a commercial product. Initial advertising will introduce this product to the market. In recent years the ‘teaser’ has become common for products yet to be release but for which there is already considerable interest.
2. Growth: when sales are increasing at their fastest rate. This is when advertising and marketing will be the most aggressive and prolific.
3.Maturity: sales are near their highest, but the rate of growth is slowing down, e.g. new competitors in market or saturation. Advertising and marketing has usually dropped back at this point.
4.Decline: final stage of the cycle, when sales begin to fall. Likely that marketing budgets would have been used up by this stage.
Extension strategies
Extension strategies
Extension strategies are marketing techniques that are introduced to extend the life of the product before it goes into decline and is lost from the market forever. Businesses use marketing techniques to improve sales. Examples of the techniques are:
Advertising – try to gain a new audience or remind the current audience of the ‘unique’ features of the product.
Price reduction – make the product more attractive to customers.
Adding value – add new features to the current product e.g. new features or apps on smartphones
Explore new markets – try selling abroad or in new regions.
Re-packaging – brightening up old packaging, or subtle changes such as putting crisps in foil packets or 70’s music compilations
Bundles – Include additional items with the product (earphones, memory cards or docks with smartphones) or bundle the product with a newer, more expensive item.
Different trends
Different trends
The typical Product Life Cycle curve cannot be applied to all products.
The typical Product Life Cycle curve cannot be applied to all products.
The life cycle of the iPhone for instance is almost in reverse with a very short introductory stage. Customers are literally queuing at the door to buy on launch day and sales remain fairly constant until the next model is announced at which point retailers clear out their stock at a reduced price ready for the process to start again on launch day.
Some companies deliberately plan to keep the lives of their products short!
Some companies deliberately plan to keep the lives of their products short!
These companies produce new or improved products at short intervals choosing not to wait until the current market reaches maturity or decline.
Companies such as Apple convince you that you need the latest device, known as ‘product churning’ and has seen more than one version of a device introduced in a 12-month period.
Apple even stop supporting older devices with their latest operating system in a further attempt to get consumers to update even when their product works perfectly well. This is an example of ‘planned obsolescence’.
Evolution of products
Evolution of products
Evolution is the gradual change that occurs in products as designers and manufacturers progressively incorporate new ideas, materials, technologies, manufacturing methods and other aspects that offer scope for improvement and increased sales. Large companies have dedicated Research and Development (R&D) departments, whose role it is to explore and develop new ideas for products.
This can be very expensive but is necessary to ensure future sales.
This can be very expensive but is necessary to ensure future sales.
Apple reportedly spent 2.5 billion dollars on research and development in 2016 Although by 2023 it was reportedly 29.9 Billion dollars!
Classic examples have already been covered in this section such as the telephone and television but also consider high end digital cameras and video recording equipment such as Go Pro’s.
The influence of fashion
The influence of fashion
The consumer driven society of today is no longer pragmatic; they don’t just buy utility products as they need them. Think of the late 1940s and the utilitarian era influenced by the post-war world..
We have become a society hugely influenced by fashion and trends. Consumers want to keep up with the latest fashions and younger buyers, especially teenagers, don’t want to seem to be ‘out of date’. While this may at one time only have applied to their appearance, they are often ‘judged’ on the technologies and lifestyles that they choose.
As consumer tastes change, so manufacturers will have to adapt to meet those tastes. In some cases, it’s the manufacturers who dictate the fashion, which further blurs the line between technology push and market pull.
Manufacturers have to respond quickly to consumer demands and many choose to copy more successful companies. Just look at the long legal battle between Samsung and Apple over the designs of their smartphones and the look of the software!
Summary
Summary
Microchips allowed for the development of mobile phone technology and the internet, both of which are essential parts of our modern day lives. Digital storage media such as CD, DVD and Blu Ray meant more immersive entertainment technologies for the consumer and advances in LCD screens and battery technology have allowed devices like smartphones and tablets to emerge; all but replacing the personal computer.
The internet, launched in 1990, was a major development in computer and communication technology and has enabled all modern day forms of remote communication and networking.
Today most consumer products can connect to each other or the internet in some way and the Smartphone has become the ‘all in one’ product for watching films, listening to music, taking photos and searching the internet. Apparently you can make phone calls with them as well…
Where the next century will take us no one knows but what is certain is that products will continue to be convergent and connected.
Revision Notes
Revision Notes
Major developments in technology you should be familiar with include:
Microelectronics
New materials (Glulam, Kevlar, PMC, Nanomaterials etc.)
Modern methods of manufacture (Electrohydraulic forming, 3D printing, fibre injection moulding, laser beam welding, physical vapour deposition)
The internet of things
Advances in CAD/CAM
You should also understand Product Life Cycles and, in a later chapter, the ‘cradle to grave’ life of products.
Prep 51
Prep 51
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