Product Life Cycle Essay, Research Paper
Every product undergoes a Product Life Cycle (PLC). Product life cycle consists of four stages, introductory stage, growth stage, maturity stage and decline stage. Each stage has its own characteristics regarding marketing objective, competition, product, price, promotion and place.
The introduction stage is the one where the marketing objective is to gain awareness. There is no competition and price is set to penetrate the market. Promotion plays an educational role, tries to teach customers to get used to the product or service and distribution is at this stage limited. This stage occurs when a new product enters the market. This stage still bring a dilemma about setting the price, because if it is set high (to cover the expenses) there is always a chance that competition will react by bringing similar product for lower price. For this reason, introduction stage is very dangerous.
Going through its introductory stage in Slovakia is a digital camera. Digital camera is famous abroad for the fact that one can easily download the pictures and send them via e-mail around the world. However, digital camera remains unusable in case one does not own a good PC and is not connected to the Internet. Plus its starting price was set probably too high. Not every one can afford it and thus no matter the quality and advantages, sales stay low. There is lack of promotion, because if there are no sales, companies do not want to invest in ads in countries with low potential. Digital cameras can definitely succeed for its mass targeting but sellers need to develop some strategy to attract customers.
This product falls into low learning category for its easy manipulation and knowledge of its perspective users.
Following the introductory stage is the growth stage. In this stage the product has successfully entered the market and established some position on it. Competition is growing and thus primary objective is to define and overcome competitive differences. There are more versions of the product available and its distribution has been broadened.
Representative of this stage is Red Bull. It was introduced to the Slovak market approximately 3 years ago. Due to a good media campaign the product has a stable position in the market with non-alcoholic stimulating beverages. The success of this product can be determined by several factors. One of them is the fact that young people recently have more opportunities to have fun in the evenings and therefore they need stimulation to keep them active for the whole night. Target market for this product, however, are not only young people, but also drivers, going on long trips, or managers, who need to concentrate on their work. Price is little higher than the “standard” one; compared to the other soft drinks, but the quality of Red Bull remains the same, and the brand name influences customers to buy this product.
The third stage of PLC is the maturity stage. If a product reaches this stage it means that product is successful and the main objective is to keep brand loyalty. Therefore, promotion is reminder orientated – telling customers that the product is still here. Product is now being distributed through as many outlets as possible. Since there are many competitors, price is set to defend profit and market share.
Example of a product in this stage is Coca – Cola. There is no need to introduce this product since it’s a daily used one. Over the years of its existence it gained a lot of regular buyers and Coke is being sold practically anywhere, from supermarket to newspaper stands. Because almost everyone buys soft drinks, there is no need to specially target a group of buyers. Therefore if there is commercial on Coca Cola it is really just to “always Coca – Cola” and even if the competition is high this product will remain on its position for a long time to come.
Since Coca Cola is used everyday by many people, it falls into low learning category.
The last stage of PLC is the decline stage. This is the final stage before product will definitely disappear from the market. Therefore, the main goal of the manufacturer is to keep the product profitable for as long and possible. As the product is declining, so is the competition. Promotion is minimal or none and its distribution are being limited again.
The audiotape is an example of product in the decline stage. The once most used medium for music listening, but currently is more and more replaced by CD’s, Mini Discs, or MP3 players. There are no advertisements on audiotapes anymore and their usage has been limited. Nowadays, even in Slovakia, audiotapes are mostly used in older types of car radios, which do not have a CD driver, and some older types of hi-fi. The trend, however, is to buy new things and new products, and therefore, the time of audiotapes is over. Looking around a music store, in mostly all of them you can find some special offer on audiotapes, and the price for these is incomparable to those when audiotapes were firstly introduced. Audiotapes are a low learning product because they, as a product require minimal knowledge. User is expected to know how to operate the respectable devices, in where the tapes are inserted.