Product Life Cycle Essay

1120 WordsJan 17, 20115 Pages
PRODUCT LIFE CYCLE EXAMPLE: COQUITLAM RESUMÉ AND WORD PROCESSING A. The Product Life Cycle and the Decision Making Process B. Marketing Throughout the Product Life Cycle The Introduction Stage The Growth Stage The Maturity Stage The Decline Stage The life cycle concept may apply to a brand or to a category of product. Its duration may be as short as a few months for a fad item or a century or more for product categories such as the gasoline-powered automobile. Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. INTRODUCTION STAGE: * First stage in the product life cycle, in which slow growth follows the introduction of a new product in the marketplace. * Goal: to get first-time buyers to try product, and to establish a market and build primary demand for the product class. * Price : generally high, for a high profit margin as the early adopters buy the product and the firm seeks to recoup development costs quickly. In some cases a penetration pricing strategy is used and introductory prices are set low to gain market share rapidly. * Firm does not usually make a profit during this stage due to R&D costs and heavy advertising costs * When the product is introduced, sales will be low until customers become aware of the product and its benefits. Some firms may announce their product before it is introduced, but such announcements also alert competitors and remove the element of surprise. Advertising costs typically are high during this stage in order to rapidly increase customer awareness of the product and to target the early adopters. During the introductory stage the firm is likely to incur additional costs associated with the initial distribution of the product. These higher costs coupled with a low

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