Philosophy of Business Report (Group 5)

The Product Cycle

Objectives

• Identify and differentiate the product cycles

• Illustrate the importance of product quality

• Describe the quality hierarchy

I. The Product Cycles

Product Cycle

The term “product cycle” is not as commonly used as “product life cycle.” It may

refer to the ongoing cycle of product development, production, distribution, and sales

within a company. It can encompass the entire process of bringing a product to

market, including research and development, manufacturing, marketing, and

customer support. The product cycle is continuous and represents the operational

aspects of managing a product within an organization.

Major Curves in the Product Cycle

Product life Cycle – That is form the time the product is born to the time it fades out

Sales life Cycle – which starts when the product is introduced to the market, and

therefore the product development stage is not considered since there is no sale

during the development stage.

Profit life Cycle – Which also starts with product development; profit computation

includes the cost of development and therefore the profit curve starts from there.

Stages in the Product Life Cycle

Development Phase - A product starts with an idea, either a new or a copy of an

existing idea or a modification of an existing one.

Introduction Phase - This stage introduces the product line to the market and is

perceived in the perspectives of the marketer and the consumer.

Marketer’s Perspective - A product is introduced to make itself felt in the market,

addressing itself not only to the consumers but to the competitors as well.

Consumers’ Perspective

Either (1) a product is introduced in order to offer something that will satisfy an

existing need; or (2) a need is created in order to sell an existing product.

Growth Phase -The market recognition and acceptance achieved by a product in the

introduction phase is given meaning at the product’s growth phase in terms of sales

that continue to build up.

Stabilization Phase – This phase is the peak of growth, the most desired phase in the

life cycled of the product.

This necessitates renewed marketing aggressiveness:

• Intensified Promotions

• Product innovation

• Special survival strategy

Decline Phase – It is called the obsolescence stage. When the product fades out of

the market either through natural or through planned obsolescence, the cycle sees

the product losing its grip on the market for varied reasons. 3 Dying-out options

open to the businessman

• Sunset strategy: where the businessman continues selling the product

until it naturally dies out.

• Harvest strategy: Where the businessman applies all possible ways of

converting inventory to cash before it finally dies.

• Concentrated Sale: which the businessman concentrates only on one

target market excluding all others.

II. The Product Quality

Intrinsic (Objective)

Quality is in the product expressed in terms of its attributes; what the producer

creates, introduces into the product and presents to the consumer. It is internal to

the product’s innate excellence expressed in its core service, and material

constitution.

Core Service - is the ability of the product to provide the utility it is intended to

provide.

Material constitution - includes the materials used and the product design, that is, the

way a product is styled expressive of its aesthetics seen in its use of color, material,

texture and form.

Extrinsic (Subjective)

Quality underlies the extrinsic goodness of the product. It is viewed in relation to

the user or perceiver, and is defined as the ability of the product to meet or exceed

the consumer’s expectation in the overall performance of the product. III. The

Quality Hierarchy

4 Identifiable quality levels in the product quality hierarchy:

• States Prescription od Quality,

• Industry’s Standard of Quality,

• Producer’s Commitment to Quality,

• User’s Criteria of Quality

Consumer Protection – The primary concern of the state in matters of product

quality is the people’s welfare specifically expressed.

User Safety - Capable of safeguarding the consumer from undue harm or danger to

his life and health.

User Compatibility - Able to meet the various requirements of the consumer specific

to the core service of the product

User Fairness - Businessman and the consumer be placed on equal footing within

the exchange process and have an equal for equal or reciprocal advantage.

Customer Satisfaction - Is the producer’s commitment on quality, the underlying

commitment of the producer to the consumer and to society.

Moreover, “Consumer must be treated as an end not as a means.”