8. PRODUCT LIFE CYCLE

TEAM:

ROSA IRIS PEREZ 

LUZ MARIA 

Product life cycle management 

is the succession of strategies used by business management as a product goes through its life cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages.

TO SAY THAT A PRODUCT HAS A LIFE CYCLE IS TO ASSERT THREE THINGS:

Ø  Products have a limited life.

Ø  Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller.

Ø  Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.

The four main stages of a product's life cycle and the accompanying characteristics are: 

1.MARKET INTRODUCTION STAGE

Ø  Coats are very high

Ø  slow sales volumes to start

Ø  little or no competition

Ø  demand has to be created

Ø  customers have to be prompted to try the product makes no money at this stage

2.GROWTH STAGE

  

v  costs reduced due to economies of scale

v  sales volumen increases significantly

v  profitability begins to rise

v  public awareness increases

v  competition begins to increase with a  few newplayers in establishing market

v  increased competition leads to price decrease.

3.Maturity stage

• costs are lowered as a result of production volumes increasing and experience curve effects
• sales volume peaks and market saturation is reached
• increase in competitors entering the market
• prices tend to drop due to the proliferation of competing products
• brand differentiation and feature diversification is emphasized to maintain or increase market share Industrial profits go down

4.Saturation and decline stage

Ø  costs bécame counter-optimal

Ø  sales volume decline or stabilize

Ø  prices, profitability diminish

Ø  profit becomes more a challenge of  production/distribution efficiency than  increased sales