Marketing

The Product Life cycle

The conditions a product is sold under changes over time. The Product Life Cycle refers to the succession of stages a product goes through. The product lifecycle goes through many phases and involves many professional disciplines and requires many skills, tools and processes. Product life cycle (PLC) is to do with the life of a product in the market with respect to business/commercial costs and sales measures;

The stages

A Typical Product Life Cycle

Products tend to go through four stages viz. introductory, growth, maturity, and decline.

Market Identification

It is claimed that every product has a life cycle. It is launched, it grows, at some point, may die. But the termination may not always indicate the end of the cycle; it can be the end of a micro-entrant within the grander scope of a macro-environment. The auto industry, fast-food industry, petro-chemical industry, are just a few that demonstrate a macro-environment that overall has not terminated even while micro-entrants over time have come and gone.

A fair comment is that - at least in the short term - not all products/services die. Jeans may die, but clothes probably won't. Even though its validity is questionable, it can offer a useful 'model' for marketers to keep at the back of their mind. Indeed, if their products are in the introductory or growth phases, or in that of decline, it perhaps should be at the front of their mind; for the predominant features of these phases may be those revolving around such life and death. Between these two extremes, it is salutary for them to have that vision of mortality in front of them. In most markets the majority of the major (dominant) brands have held their position for at least two decades. The dominant product life-cycle, that of the brand leaders which almost monopolize many markets, is therefore one of continuity.

Thus, the life cycle may be useful as a description, as well as a predictor; and usually should be firmly under the control of the marketer.

Hence for a marketer its important to identify which stage the product is in, and this is to be done by a thorough Market analysis and research and mapping the conclusions. It is also required thereafter to initiate right changes in the marketing mix to augment to growth of the product.

The following mentioned paragraphs are the analysis of indentifying the product stage;

Marketing research and analysis

In order to make fact-based decisions regarding marketing strategy and design effective, cost-efficient implementation programs, and firms must possess a detailed, objective understanding of their own business and the market in which they operate.

Marketers' analysis is structured into three areas: Customer analysis, Company analysis, and Competitor analysis and analysis of the industry in Context.

The focus of customer analysis is to develop a scheme for market segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segments. Marketers must work to develop detailed profiles of each segment, focusing on any number of variables that may differ among the segments: demographic, psychographic, geographic, behavioral, needs-benefit, and other factors may all be examined. Marketers should also attempt to track these segments' perceptions of the various products in the market using tools such as perceptual mapping.

In company analysis, marketers focus on understanding the company's cost structure and cost position relative to competitors, as well as working to identify a firm's core competencies and other competitively distinct company resources. They may also work with the accounting department to analyze the profits the firm is generating from various product lines and customer accounts. The company may also conduct periodic brand audits to assess the strength of its brands.

Marketer would also need to profile various suppliers, distributors and other channel partners, joint venture partners, etc. An analysis of complementary products may also be performed if such products exist.

He would have to employ various tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter's five forces (rivalry, threat of substitute, buyer power, supplier power, barriers to entry/threat entry), analysis of strategic groups of competitors, value chain analysis, regulatory laws and others.

In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. He would have to examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation etc.

Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. As such, they often conduct market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:

Ð'* Qualitative marketing research, such as focus groups

Ð'* Quantitative marketing research, such as statistical surveys

Ð'* Experimental techniques such as test markets

Ð'* Observational techniques such as ethnographic (on-site) observation

When and how to introduce changes in Marketing Mix and Strategy

Once the marketer has obtained an adequate understanding of the customer base and the position of the product and its current stage, he would have to make key strategic decisions and introduce changes in the marketing mix (product, price, place and promotion) to maximize the revenues and profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including revenue growth, market share, long-term profitability, or other goals.

A marketer changes his strategies depending upon which stage the product is in. Strategies for each aspect of the marketing mix see an evolution. The challenge at first is to gain market acceptance, then to expand the