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Sunday, January 29, 2012

The solved assignment has been prepared for “State the meaning of Product life cycle and explain the different stages involved in it”. It is the solved assignment of MB0046 (Marketing Management) for SMU MBA. You should take a view of Micro Environmental Forces of Marketing and International Market Entry Strategies too.

The product which is introduced into the market will undergo some modifications over the period. Its sales also fluctuate. Therefore marketer is interested in finding out how sales changes over period? And what strategies best suits at that point? A product life cycle can be graphed by plotting aggregate sales volume for a product category over time.

Generally the curve resembles bell shaped curve but it is not the only one type of curve. We can obtain style, fashion or fad style of product life cycles also.

According to the type of cycle of product passes through five stages:

1. Product development stage: In this stage company indentifies the viable idea and develops it. Sales in this stage are zero but require huge research and development budget.

2. Introduction stage: Company introduces the product into the market. As the product is new to the market, awareness is usually very low.

3. Growth stage: Company gets experience over the period and now tries to get the maximum market share. Sales will grow rapidly resulting in lesser cost and better profit.

4. Maturity stage:

  • a. Peak sales
  • b. Low cost per customer
  • c. High profits
  • d. Competition based pricing
  • e. Communicating the product differentiation to consumer
  • f. Improving supply chain efficiency
  • g. Defend the market share
  • h. Industry experiences the consolidation

5. Decline stage: In this stage, product and profit declines. Company should phase out weak items from their product mix.

Some Other Product Life Cycles:

1. Style: a style is a basic and distinctive mode of expression appears in the field of human behavior.

2. Fashion: currently accepted or popular style in a given field for example, cargo jeans are now fashion with college going students.

3. Fad: a fashion that enters quickly, adopted with great zeal, peaks early and decline very fast for example, when the pager is introduced, everybody would like to have the product. But when people found mobile as alternative the demand for the product went down drastically.


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