Marketing Management

PLC
NPD

Manik Katyal
 Product Life Cycle

• It is a sequence associated with changes in

marketing situation, impacting the marketing
strategy and marketing mix
 Various different factors it works on

• Advertising
• Exploring and expanding to new markets
• Price reduction
• Adding new features
• Packaging
• Changing customer consumption habits
• Special sales promotions
• Enhancing interest of consumers
PLC
 1. Market introduction stage
• Costs are very high
• Slow sales volumes to start
• Little or no competition
• Demand has to be created
• Customers have to be prompted to try the
product
• Makes little money at this stage
 2. Growth stage
• Costs reduced due to economies of scale
• Sales volume increases significantly
• Profitability begins to rise
• Public awareness increases
• Competition begins to increase with a few
new players in establishing market
• Increased competition leads to price
decreases
 3. Maturity stage
• Costs are lowered as a result of increasing
production volumes and experience curve effects
• Sales volume peaks and market saturation is reached
• New competitors enter the market
• Prices tend to drop due to the proliferation of
competing products
• Brand differentiation and feature diversification is
emphasized to maintain or increase market share
• Profits stagnant and begin to decline
 4. Decline stage
• Costs increase due to some loss of economies
of scale
• Sales volume declines
• Prices and profitability diminish
• Profit becomes more a challenge of
production/distribution efficiency than
increased sales
S No   Introduction Stage Growth Stage Maturity Stage Decline Stage

Product well accepted

New Product is Modifications in Product looses its
1 Product but continous
Launched Product appeal
Differenciation's desired

2 Awareness Low or No Awareness Awared and Informed Awared, Informed and Die hard loyal
Level Loyal

3 Sales Low sales Increasing sales constant sales Reducing sales

New and Existing

4 Customer New Customers Existing Customers Hard Core loyal only
Customers

Stopped budgeting on
High cost for
High cost for Reducing cost on the two departments,
Advertising //
5 Cost Advertising and Research and rather funds diverted
Reducing cost on
Research Research Advertising for new product
development

Informative Advertising Persuasive Advertising

6 Promotion and Aggressive Sales and Sales promotins are Reminder Advertising No Advertising
Promotion are used used
S No   Introduction Stage Growth Stage Maturity Stage Decline Stage

Competitor's start
Competitors don't pay noticing you, taking you Competitor's start
7 Competitor noticing and following Competition ignores
much attention seriously respond to the you.
market actions

You take a decision of

8 Industry New Entrant Budding player in May be Leader or No. withdrawing from the
Player Industry Two position in Market competitive race, what
ever the reason may be.

9 Profits No Profit Some Profit Increasing Profit Reducing Profit

Pricing Matching the

10 Introductory Pricing Aggressive Pricing competition / leading High priced
Strategy
from front

Restricting the drop in

11 Sales Target Sales Targets Aggressive Sales targets Maintaining Sales
sales

Channel of Distribution
12 Channel of Set up in Main market expands in all probable Most intense disrbution Only profit distribution
Distribution or home market network networks are kept.
directions
New Product Development
 8 Steps for a New Product Development
Step 1: Generating Idea.
a) Product Idea Brainstorming
Step 2: Screening the Idea.
Step 3: Testing the Concept.
Step 4: Business Analytics.
Step 5: Beta/Marketability Tests.
Step 6: Market Testing.
Step 7: Commercialize.
Step 8: Post Launch Review and further success.
 Step 1: Generating Idea.
• Analyzing basic internal and external SWOT
factors
• Analyzing current marketing trends,
• Taking in Consideration
– Distance one selves from the competition by
generating ideologies which take affordability, ROI
and widespread distribution costs into account.
 1a. Product Idea Brainstorming
• The first step is to generate an idea for the product.
• Ask employees, especially those who deal with
customers regularly, for product ideas.
• Survey customers for feedback on existing products.
• Examine your industry to see whether there are
areas where useful products do not exist.
• Create an online survey for your customers or social
media fans to take.
• List all ideas for a new product.
 Step 2: Screening the Idea.
• Make a list of product ideas and share it with
the appropriate decision-makers in the
company, such as the management team.
• Narrow the list to just a handful of the best
ideas, basis
– The pros and cons of each idea
– Their potential to generate revenue,
– The time and resources you have to actually create
the products.
 Step 3: Testing the Concept.
• Patent research,
• Design due diligence,
• Other legalities involved with new product
development,
• Does the consumer understand, need or want the
product or service?
• Seek feedback from
– customers,
– employees and
– partners
on which idea is most appealing.
 Step 4: Business Analytics
• Build a system of metrics to monitor progress.
– Include input metrics, such as average time in
each stage, all costs affiliated with the product,
such as development costs and operational costs.
– Output metrics that measure the value of
launched products, percentage of new product
sales and other figures that provide valuable
feedback, determine the profit margin.
– Competition exists for similar products.
 Step 5: Beta/Marketability Tests
• Arranging private tests groups,
– a handful of good customers and
– key partners. 
• Launching beta versions of product with test
groups.
• Forming test panels after the product or products
have been tested
All this will provide you with valuable information
allowing last minute improvements
 Step 6: Market Testing.
• Do a small product release in select areas
(Pilot launch).
• See whether the product sells well, and
evaluate why sales are high or low.
• Evaluate the price and the effectiveness of the
various marketing messages.
A small launch helps determine what needs to
be done before an official launch.
 Step 7: Commercialize
• Make adjustments to the product or develop a
new version of product.
• Decide on the timing of the launch.
• Begin production for the first round of the product
launch.
• Evaluate how many products to produce based on
your market demand for the product.
• High spending for Advertising and promotions
• Speak to product distributors about ordering the
product, filling the stores with their products.
 Step 8: Post Launch Review and further
Success
• Review the entire launch process efficiency.
• Work for continues improvements.
• Gauge overall Customer value.
• Create differentiations.