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Sunday, August 1, 2010

Innovation to Profits - Product Life Cycle (Part 1 of 4)

To continue to move a business forward a steady stream of innovation is needed to change with demands from the consumer.  A new product goes through a sequence called the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.  The four stages of the product life cycle are:
  • Introduction Stage
  • Growth Stage
  • Maturity Stage
  • Decline Stage
The Introduction Stage the company seeks to build product awareness and develop a market.

The following is typical at this stage:
  • Product branding is established.  Intellectual property rights to patents and trademarks are obtained.
  • Pricing may be low to penetrate and gain market share.
  • Distribution is selective until acceptance by the consumer.
  • Promotions are aimed at innovators and early adaptors.
Peter Marshall describes the cycle of life, “One of the most fascinating things about golf is how it reflects the cycle of life. No matter what you shoot, the next day you have to go back to the first tee and begin all over again and make yourself into something.”