Levels of a product and product life cycle

Levels of a product and product life cycle. Introduction to the module. The development of a product
depends on individual stages and levels of a product's life that promote the success of the product. In
this module, you will learn the different levels of a product. We will introduce you to different stages of
a product life cycle.

Topics to be covered.

Product levels.

Product life cycle.

Introduction stage.

Growth stage.

Maturity stage.

Decline stage.

Product levels. Customers can choose a product based on their perception of its value. Satisfaction
refers to the degree to which a product's actual use corresponds to its perceived value at the time of
purchase. A consumer is happy only when the perceived value is equal to or greater than the actual
value.

Five distinct levels of analysis can be applied to a product shown in this video. Core

Benefit The basic need or desire that the product or service satisfies for the customer. For instance,
consider the need to process digital images. Basic Product A version of the product containing only
those attributes or characteristics needed to operate correctly. For instance, the requirement to process
digital images can be met by a low end personal computer equipped with free image processing
software or by a professional.

Processing Laboratory.

Expected product. The set of attributes or characteristics that consumers typically expect and approve
when making a purchase. For instance, the device is configured to perform image processing quickly and
features a high resolution, accurate color display. Augmented product. Additional features, advantages,
attributes, or related services that distinguish a product from its competitors.
For instance, the machine can come preloaded with high end image processing software at no additional
charge or a significantly reduced incremental cost.

Potential product. This covers all possible enhancements and transformations to a product. To maintain
potential customer loyalty, a company must continuously Pricing and delighting customers through
product enhancements. For instance, the customer receives regular software updates that include new
and valuable features.

Product lifecycle. The product lifecycle, PLC, is a critical concept in product development. This definition
can be visualized as a curve in a graph where the horizontal axis represents time. And the vertical axis
represents the product sales or profits. Typically, the product life cycle curve is formed like an S, as
shown below.

This curve is divided into four stages, which are introduction, growth, maturity and decline. The PLC
model is most helpful in designing successful marketing strategies for physical products and services at
various stages of their life cycles. Several prominent experts who consider the PLC model as the
framework of marketing strategy have made a variety of recommendations about the marketing
implications of each stage.

Introduction Stage During the introduction stage of a product, The product is mainly unknown, and
market volume grows slowly. Still, the costs associated with communicating the product's availability
and creating distribution networks are significant, and as a result, little to no profit is realized despite the
product's high price.

When launching a new product, line management can sell a limited number of models with a modular
design that allows for versatile variants to satisfy newly defined segments. During this stage, quality and
quality control are critical. When price and promotion are considered concurrently, management must
choose between four alternative strategies, as illustrated in the following figure.

First, a high profile strategy involving introducing a new product at a high price and a high level of
promotion. Second, a low profile strategy involving introducing a new product at a low price and a low
level of promotion. Third, A selective penetration strategy involving introducing a new product at a high
price and low level of promotion.
Fourth, a preemptive penetration strategy consists of introducing a new product at a low price and low
level.

Management must weigh the following fundamental factors when deciding on one of these four
strategies. The factors include. First, the market size. Second, market awareness of the product. Third,
the degree of price sensitivity. Fourth, the form and nature of competition. Fifth, the company's cost
structure.

Distribution should be intensive and thorough, emphasizing introductory offers and logistics that
prioritize customer support and high inventories at all levels.

Growth stage. If a product achieves acceptance, it enters a period of increased sales. Refer to as the
growth stage, due to the combined impact of initial marketing, distribution, and word of mouth power.
Profitability increases at this stage. At this stage, management should prioritize best selling variants, the
addition of a few similar models, product development, and the removal of excessive requirements with
low market appeal.

In terms of pricing, management can prioritize market expansion and promotional pricing opportunities.
Promotion should turn its focus away from product recognition and toward product choice. Distribution
should be comprehensive and broad, with new distribution platforms added to increase product
visibility.

If the product has attained consumer acceptance associated with the growth stage, competition is likely
to reach the market. If the price were not a factor initially, the introduction of competition would result
in price reductions. During the maturity stage, Sales cease to rise exponentially and begin to plateau,
resulting in a decrease in gross margin.

Throughout this point, which is significantly longer than the previous ones, management faces the most
formidable obstacles. The majority of products are in the maturity stage of their life cycle, and most of
the product decisions are made during this stage.

Management will attempt to boost a static sales picture by enhancing the product's Transcripts are a
great way to use the product's tangible and intangible characteristics to draw new consumers and
increase current users use. Consider opportunities for product enhancement and cost savings by
modifications to the product's quality features and appearance.
The proliferation of packaging, private labels, and product services can also help the company at this
stage. Price reductions can be used to target new segments of the market and buyers of competitive
goods. Additionally, management should look for possibilities for gradual pricing, such as private
branding contracts.

Consumer and trade loyalty should be maintained by promotion, and a quest for fresh and brilliant
advertising appeals that capture the consumer's interest and favor should be sought.

At this stage, another way to capture the consumer's attention is through aggressive reward schemes
and numerous short term promotions, offers, and contests. As with the previous stages, distribution
should be intensive and comprehensive. When a large proportion of the product's potential buyers
have purchased it, and prices settle at a pace determined by satisfied buyers replacement purchases,
the market is said to be saturated.

Gross margins typically decrease as prices soften and rivals fight for market share in a saturated market.

Decline Stage Finally, the product enters the decline stage, at which point it ceases to be profitable. This
may occur due to the availability of technologically advanced goods and changes in the consumer's
economic climate and purchasing habits. As the product's revenues decrease at this stage, management
can either discontinue the product or, if offered in various versions, sizes.

And styles can finish certain items that do not generate a significant profit. However, management has a
range of options for eliminating the commodity. For example, it may adopt a concentration strategy. It
focuses its resources exclusively on the most robust markets, gradually phase out advertising and
distribution activities as they become marginal, and sustain profit level pricing regardless of the impact
on market share.

Alternatively Management could follow a milking strategy. It drastically cuts marketing costs to boost
current revenues, well aware that doing so would intensify the rate of sales decline and eventually result
in the product's demise. If strong enough hardcore loyalty remains at this stage, the product will be sold
at the previous or even higher price, implying good profits.

Summary. In this module, you have learnt. The product life cycle model is highly beneficial for
developing effective marketing strategies for physical goods and services at different life stages. The
product's introduction stage is when the product is mainly unknown, and consumer volume rises slowly.
Management should prioritize best selling versions, the addition of a few similar models, product
production, and the elimination of unnecessary specifications with poor market appeal during the
growth stage. Sales cease to grow exponentially and begin to plateau during the maturity stage,
resulting in a decline in gross margin.

At the decline stage, management may either discontinue the product or, if additional options, sizes,
and models are available, finish unprofitable products.

Thank you. This is the end of this module. Thanks for watching. Happy learning.