Innovation to Profits - Product Life Cycle (Part 3 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:
The Maturity Stage the strong growth in sales diminishes and competition intensifies. Primary objective at this point is to defend market share while maximizing profit.
Product features may be enhanced to differentiate the product from that of competitors.
Pricing may be lower because of new competition.
Distribution becomes more intensive and incentives may be offered to encourage preferences over competing products.
Promotion emphasizes product differentiation.
In this competitive stage the spirit of winning is essential. As Nancy Lopez states, “A competitor will find a way to win. Competitors take bad breaks and use them to drive themselves just that much harder. Quitters take bad breaks and use them as reasons to give up. It's all a matter of pride.”