Product: Any good or service that services to satisfy the needs or wants of customers

Product life cycle: The different stages that a product is likely to go through from its initial design and launch to its decline

R&D stage: Designing & Testing the product

- Companies invest a lot of money developing a
new idea into a product (high costs)
- No sales revenue
- High R&D costs
- Prototypes(시제품)&test markets are used

PLC stage Investment level Profit Cash flow

R&D Very high None High
Launch
Launch Very highto market
stage: Product introduced Growth
Little, if any stage: Sees salesNegative
revenue increasing
Growth - High
Sales slowly increase - More consumer awareness
Yes, rising Positive increases sales quickly
Maturity- Less
Extensive promotion - Increase
High, little/no growththe distribution
Positive
Decline - Not profitable Little, if any Yes, falling
- Strong profits Positive, falling
- Objective is to move to growth stage as quickly - More competitors
and become market leader - Product differentiation
- Innovators buy the product - Early adopters(사용자) buy the product

Extension strategy: Maintain sales revenue in the maturity phases

Maturity stage: Sales revenue increase, slowly
- Sales increasing (slower rate) & peaks
- Economics of scale
- Heavy promotion to differentiate brands
- Product lines extended (more product, versions
(버전) & variations (변화))
- Unsuccessful competitors drop from market
Decline stage: final stage of PLC
- Consumer tastes have changed or
product becomes old
- Sales start to fall
- Promotional spending is cut
- Price, profit↓
- Companies stop production
- Product is dropped from the market

 Reduce price - Target different market segments

 Sell existing products into new markets - Develop new promotional strategies
 Find new uses for the product - Change product’s packaging
Boston consulting group matrix: Marketing planning tool for product portfolio
AD - Tool used to identify the need to rebalance portfolio
- Can be applied at all levels
Boston Matrix
Dis - Market share does not always translate to profit
- Does not identify root cause of low market share
- Simplifies complex issue of portfolio management

Branding: Differencing a firm’s products from competitors

 Sign - Branding can be so influential that is actually alters the consumers feeling & their perception of the product
 Symbol
Aspects of branding: Brand awareness
 Color scheme ∙ Attracts consumers when they are making buying decisions
Measures the extent to which potential customers or the
 Font ∙ Gives the firms a competitive edge over rivals, resulting in
greater market share
public recognizes a particular brand
 Design ∙ Develops long-term sales through brand loyalty

Role & Advantages Brand awareness

Brand development
- Differentiation
↓ Marketing process of proving and enlarging the brand
Brand development

- Recognition Helps to extend a product’s life cycle name to boost sales revenue & market share
- Legal instrument Brand loyalty
- Reduces risk Consumer keeps buy a same brand of a product. Have a
- Premium pricing preference of that brand
- Reduce price elasticity of demand Brand value
- Extension Premium that customers are willing to pay for a brand
- Barriers to new competitors name over and above the value of the product itself

Packaging: The ways in which a product is presented to the consumer

Importance:
- Huge impact on customer perceptions of a product or brand
- Differentiates from competitor products
- Protects that product from damage during transportation
- Provides information (law)
- Makes distribution easier
- Used to impulse(충동) buying
- Promote the brand or the business