📚 Seth MB


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Product Lifecycle

Last updated Jan 3, 2023 Edit

  1. convenience goods
  2. speciality goods
  3. 70% of new products fail within 3 years because entering the market is the most difficult part of a product lifecycle. In order to enter the market, the product needs successful marketing and to meet the needs or wants of the consumers in order to gain enough recurring sales for the product to be deemed profitable. If the product cannot break through this initial barrier, then it will end up being a drag for the businesses revenue and will have to be discontinued. Also, there are some products that may not be intended to last more than 3 years. Many craze products such as Loom Bands and Fidget Spinners didn’t need to last 3 years to make the companies producing them a huge amount of money. So it isn’t vital for some products to last 3 years, whilst some more expensive products may need to last for a long time to be seen as successful, such as a watch. If the company stops selling them after 6 months then they seem like a low value product.

4) A star has a very rapid growth rate and a high market share—this makes it the top of the market and suggests it is a desirable/popular product. Whereas a dog is a much slower growing product which is likely to be focused on a much more niche market segment or a less succesful product. 5)

A theoretical model which describes the stages a product goes through over its life.

Development: Absorbs significant resources. May not be successful.

Introduction: New product launches. Low level of sales. Usually a negative cash flow. Heavy promotion needed.

Growth: Fast growing sales. Cash flow may become positive. Market grows, competition enters. Unit costs begin to fall with economies of scale.

Maturity: Slower sales. Intense competition. Fight for market share. Cash flow very high, positive. Weaker competitors leave the market.

Decline: Falling sales, market saturation. More competitors leave. Decline in profits and overall weaker cash flow.

Extension: Lower price, change the packaging.

Consumer and industrial products

Over the stages of the product lifecycle, we measure sales over time.

Stages are as follows:

# Product Portfolio Analysis

Product portfolio analysis assesses the position of each product or brand in a firm’s portfolio to help determine the right marketing strategy for each.

Firms should analyse their portfolio of products, categorised as:

The Product Lifecycle

The Boston Matrix

# Question Marks

# Strategy

# Stars

# Strategy

# Cash cows

# Strategy

# Dogs

# Strategy

# How valuable is the Boston Matrix Model?