How A Product Life-Cycle Influences Marketing Activities

Various stages through which a product passes during its lifetime are termed as product life-cycle. It includes introduction, growth, maturity, and decline. The time period involved varies from product to product, ranging from months to centuries. 

 

David Sklaver — Senior Marketing Manager

The following characteristics and strategies are associated with different stages.

Introduction

This is often considered to be the riskiest and the most critical stage of the product life-cycle.  There are numerous teething problems to be tacked which may lead to the collapse of a new product at an early stage. Tough competition, lack of relevant knowledge, experience, unfavorable government laws and unpredictable consumer behavior are a few issues that must be taken seriously by a company, especially at the introductory stage. Sales are low in relation to costs. Profit is usually non-existent and typically businesses pursue the objective of survival at this stage. It is important for a business to use aggressive advertising as the product is launched in order to ensure that primary demand is created. Informative advertising is an advertising technique in which all the salient features of a product are highlighted so that it can be introduced to the customers effectively, it is recommended at the introductory stage. This should be coupled with an appropriate pricing strategy so that a positive consumer response can be triggered. Skimming strategy is usually used for luxury items and penetration pricing strategy is used for fast moving consumer goods.

Growth

This stage is characterized by an increase in the market share due to a favorable response of the customers towards the product. Now the company is in a position to enjoy multiple benefits. Profits indicate an upward trend and product has managed to find a good-hold in the new market.

Maturity

Maturity indicates that the sales have leveled off and even though the company is generating a substantial amount of funds and profit through the sale of this product, there is no significant growth. There is an established brand loyalty.

Decline

Decline describes the alarming situation characterized by a reduction in sales, market share, and profit. Customers start switching to better substitutes available in the market. Low sales lead to a decrease in the production level.

Tips To Write a Good Business Plan

A business needs a constant care and time every day. If you are the owner or the manager of the business then you have the huge responsibility of business on your shoulders as you have to look at the number of activities in daily life. To perform the activities you need to have the plan which can save your resources and time. 

David Sklaver — Founder/CEO, CONDUCTIVMEDIA

To achieve the business goals you should have the effective business plan that has all the guidance and method that you are going to use to achieve your goals.

Before preparing a business plan you should consider some points to make it more effective and good. 

Make it concise and add executive summary

One of the good tip that you need to make your business plan more productive is that you should make your plan as concise as possible because no one going to the read the plan 100 pages long or even the 50 pages long and since they have not read the plan completely, the implementation would be quite impossible. So try to make the business plan to the point that other people like executioner can easily read and understand. Making the business plan concise does not mean that it should omit the important details. Always add the executive summary of business in the plan.it would make easier to understand the business and its goals.

Know your audience or client

To make a good plan you need to know your audience or client about whom you are making the business plan. Always consider the liking and disliking of your client and make a plan which best represents the preferences of your client. Before making a business plan the better way is to do a survey and know about the clients. And after having all the information will make it easier for you to incorporate an effective business plan for you.

Always add the execution plan

Only adding the basic points about the goals are not enough. You need to have all the information about how you are going to execute that plan. The methods of execution, the resources you need to execute the plan including human resource and time frame, all these things should be added to the business plan. A good business plan also includes the information that who is going to perform which activity. These things will help a lot in future to achieve the goals.