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In time of IPhone released and a redesigned category is interesting talk about products.
The life of a product is the period over which it appeals to customers. The sales performance of any product rises from nothing when the product is introduced to the market, reaches a peak and then declines to nothing again.
A good example of products that have had short lifespan in recent years are home computers. New models with new specifications are launched on the market rapidly to be replaced by newer models.
The classical theory of Product life cycle has 4 stages.
1. Introduction
2. Growth
3. Maturity
4. decline
1. Introduction stage
this is the introducing stage of a new product to the market. at this stage ppl communicate the usage, advantages of using, characteristics of this product. this is more of an informative advertisement stage. (bcos ppl need to get to know abt the product first). at this stage companies price the product at a higher level to cover their Research and Development costs and there is no competition. Availability of the product is more exclusive and selected outlets only.
2. Growth stage
at this stage ppl come to buy the product more an sales are boosting at the small period of time. 1 or 2 competitors also could come in to the market. Companies bring the price down to face the competition. make the product available in more outlets. (in marketing you call this penetration strategy). more spending on advertisement.
3. Maturity
product matures in the market as more and more competitors are coming in. companies bring the price to the minimum possible level. penetrate more. reduce the advertisement spend a bit less, focus on Point of sale purchase and direct marketing.
4. decline
when it comes to the declining stage marketers have two choices. Either to let the product decline in the market or else relaunch it. if you wanna let it decline you try to sell more and reduce stock maintenance. this stage is where you see more and more sales promotions are happening. lots of give aways, price cuts etc. if you wanna relaunch it’s a beginning of a new product life cycle
With more than 1/2 million units already sold in the first days is the Iphone an exception to the theory?
Cheers
Lucio Dias Ribeiro
