Product Life Bike (With Diagram)
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This commodity provides an overview on Product Life Cycle.
The production life wheel concept derives from the fact that a production's sales volume and sales revenue follow a typical pattern of v-phase bike. The life cycle is a fact of existence for every product. It is similar to the homo life cycle.
The length of the life cycle, the duration of each phase and the shape of the bend vary widely for different products. Simply in every instance, obsolescence or decay eventually occurs when the need disappears or a better, cheaper and more convenient product may accommodate the same need or a competitive product due to superior marketing strategy of a sudden gains a decisive advantage.
The product life cycle should exist preferably termed as product marketplace life bicycle as it is related to a given particular market. For example, an former product (in the market of U. South. A.) volition accept a new life cycle when it is introduced into a foreign market, say, in India.
The product life bike concept indicates that the product is built-in or introduced, grows, attains maturity and the bespeak of saturation in that market place and then sooner or afterwards information technology is bound to enter its failing stage eastward.g., decay in its sales (history).
This life cycle of a production is depicted below:
Note: 1. Introduction: Sales are starting. 2. Growth: Rising sales at increasing rate. 3. Maturity: Rise sales at decreasing rate. 4. Saturation: Stable sales. five. Decline: Falling sales.
Every production moves through a life wheel having v stages: introduction, growth, maturity, saturation, and turn down (some authors include saturation into maturity). The life cycle gives the sales revenue and profit margin history of a product over a time frame.
1. Introduction:
In the early on stage when the product is introduced in a marketplace, sales revenue begins to abound simply the rate of growth is very slow. Turn a profit may not be at that place as nosotros have depression sales book, big production and distribution costs.
We may crave heavy ad and sales promotion. Products are bought cautiously on a trial "basis. Weaknesses may be revealed and they must exist promptly removed. Price of market development may be considerable. In this stage product development and pattern are considered critical.
2. Growth:
During the growth phase, the rate of increase of sales turnover is very rapid. Profits also increment at an accelerated rate. In spite, of competition, we may have rise sales and profits.
The firm gives top priority to sales volume and quality maintenance may take secondary preference. For marketing success, manufacturing and distribution efficiency are vital factors. In this phase constructive distribution and advertising are considered equally primal factors.
3. Maturity:
During this phase peachy contest brings pressure level on prices. Increasing, marketing expenditure and falling prices (in the battle for market share) volition reduce profits. Additional expenditure is involved in product modification and improvement or broadening of product line.
Marketers have to prefer measures to stimulate demand and confront competition through boosted advert and sales promotion. Overall marketing effectiveness becomes the central factor in the stage of maturity.
4. Saturation:
The saturation point occurs in the market place when all potential buyers are using the product and nosotros take simply replacement sales. Consumption achieves a constant charge per unit and the marketers accept to concentrate exclusively on a fight for market share (with higher marketing expenses). Prices may fall apace and profit margins may become modest unless the house makes substantial improvements and realizes cost economies.
5. Decline Stage:
Once the peak or saturation betoken is reached, production inevitably enters the turn down stage. It may be gradually displaced by some new innovation. Sales drop severely, competition dwindles, and even then the product cannot stand in the market place.
It may exist priced out of the market by other new innovations. At this stage price becomes the principal weapon of competition, and we have to reduce considerably expenditure on ad and sales promotion. Price control becomes the key to generate profits.
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Posted by: edwardgazile.blogspot.com
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