The product life cycle means every product has a capability such that it can be used for a certain period of time. It passes through the different stages of life as a man moves from childhood to maturity and old age. Similarly products have life cycles by which they are monitored and evaluated. The first stage in the product life cycle is product making or development. The product is in development when the companies are making specific products which they invest their money in and get nothing from these products at this stage.
Secondly the product is introduced in the market. This is second stage. At this the stage the advertising campaign is run on television to tell people about this product. The product suffers with the competition in the market. In this stage the price is low because the product is in the launching stage. Heavy expenditure is being put on the promotions to boost sales. The next stage is the growth stage. In this stage the sales of the product are on a peak and the product has captured a large geographical area. The product has deeply penetrated into the market at this stage. The product has great distribution in the market and is available in every shop of the market.
There are 4 distinct stages of Product life Cycle. These are:
Introduction: It is the first stage of the introduction of a product. The firm emphasizes on building product awareness and developing the market.
Growth: The emphasis is on building consumer preferences for the brand and increase the market share.
Maturity: At this stage the sales of the company start declining. Competition gets intense and the company is trying to protect the market share.
Decline:The sales decline and the company either has to divest or reduce costs
The four stages of product lifecycle:
1. Introduction stage
eg: Nokia N97. Its just introduced in the market.
2. Growth stage
eg: shampoo of Fiama. After the introduction its in the growth stage.
3. Maturity stage
eg: Colgate toothpaste
4. Decline stage
eg: Maruti SX4
The answer of life is Four-Wheeler racing.
The Product Life cycle consists of the following four stages:
Motive: Creating awareness
In this stage:
Branding begins and quality levels are established. If possible, patents and trademarks are obtained for the intellectual property. Distribution is limited, costs are high, and volume is low.Promotion is based on creating awareness and making a place in the market.
Motive: Penetration, Positioning and loyalty.
In this stage:
Prices are steady to declining, as every participant in the industry is focused on market share and becoming the low-cost producer. Costs are declining with increasing volumes, and profits are improving. Distribution is increasing as well. Competitors are attracted to enter the market.
During this stage, as competitors enter the market:
Marketing strategy starts to shift from education and awareness to differentiation.the sales presentation moves to strong proposals and demands higher presentation skills. There is a need to develop trust. The sales cycle is longer, and there are more complex decisions.
Motive: Visibility (Reinforcement)
The market maturity stage occurs when the market has become saturated. During this stage:
Sales growth rate tends to decrease. Efforts are focused on differentiation of the product. Pricing may be lower because of increased competition. More internal pressure is placed on reducing costs. Margins begin to shrink as marginal competitors are forced out of the market. Distribution is maxed, and promotions come into play as a way to encourage preference over competing products.
The market decline is recognized by the downturn in the demand for the product. It may be caused by the introduction of an innovative new product or changing consumer tastes. As volume declines, competitors focus on maintaining market share while maximizing profits. Efforts focus on reviving the product by adding features and finding new uses.
In this stage, one of these can be done:
Repositioning Withdrawal Run-Out Phase out.
In this stage, the costs will remain steady or decline. Advertising should be reduced unless there is some hope of repositioning the product in an effort to prolong its life and the potential for profits.
The conditions a product is sold, change over the passage of time. The Product Life Cycle is the succession of stages a product goes through. The basic stages are:
Market introduction stage
Stability or decline stage
For a CD players, I think they are in the decline stage. They need to take into account the new updations like ipod and dvds. They need to revamp the technology to survive in the market.