Marketing Mix: Product Life Cycle

AS Business Studies Unit 2

Aims and Objectives

Aim:
Understand the product life cycle.

Level

Objectives:
Define the product life cycle

E-D

C-B
A-A*

Explain the different stages of the product life cycle

Analyse the usefulness of extension strategies

Starter

Can you think of any specific products that have not changed over the last 50 years?

Product Life Cycle

Product Life Cycle A theoretical model which describes the stages a product goes through in its lifetime.

Product Life Cycle Stages

Research and Product Development

Introduction
Growth Maturity

Decline
Extension Strategy or Termination

Business Considerations at each Stage

Businesses must consider at each stage the following: Net cash Flow Profit Marketing Strategy

Product Life Cycle

Development Introduction Growth Maturity Decline

Sales ()

Time

Product Life Cycle

The time scale of the product life cycle will be different for different products, from months to years.

Think of 4 products that have a very short life cycle. Think of 4 products that have a very long life cycle.

 Place the following products where you feel they are on the product life cycle:

Development Introduction

Growth

Maturity

Decline

Sales ()

Time

Decline

Why do some products go into decline?

Product Life Cycle Extension Strategy

Development Introduction Growth Maturity Decline

Sales ()

Extension Strategy

Time

Extension Strategies
Aim of marketing is to keep up the maturity level of sales for as long as possible. Sales can be increased using product development this is used to extend the life of the product.

Products can also be extended by changing any element of the marketing mix.

Are you ready?

30 seconds to define the product life cycle and list the 5 stages

Can you beat the clock?

time up!

One Direction
Outline 3 reasons as to why One Directions debut single was unlikely to make a profit when it was first launched.

Outline 3 reasons why One Directions debut single was unlikely to make a profit when first launched
Initial development costs of the single, such as CD design and manufacture would need to be covered before the single is profitable Initial promotional costs will have been very high when the single was released meaning the single is unlikely to make a profit in early stages

1
2 3

Low download price would mean less revenue to cover costs in the early stages of the lifecycle

One Direction
At which stage of the product life cycle was their debut album most likely to make profit?

X-Factor
Where would you place the X-Factor on the product life cycle?

X-Factor
Outline two reasons that the X-Factor may have experienced decline.

X factor may have declined because....

Familiarity with the format. The X Factor has been going now for 8 years with very little change

Change in judges, in particular, Simon Cowell not taking part

List 3 ways in which ANY business can extend the life cycle of its product.
Reduce the price of its products Increase promotional spend/ methods Trying to find new customers/ markets

1
2 3

Successful Extension Strategies

Plenary

Do products always enter the decline phase of the product life cycle?