Module 6:
Product Life Cycle
&
Recent Trends in Marketing
Product Life cycle
• A product life cycle is the length of time from a product first being
introduced to consumers until it is removed from the market.
• Product has a life cycle is to assert four things:
• Products have a limited life.
• Product sales pass through distinct stages, each posing different challenges,
opportunities, and problems to the seller.
• Profits rise and fall at different stages of the product life cycle.
• Products require different marketing ,financial ,manufacturing , purchasing ,
and human resource strategies in each life-cycle stage
Module 6- Product Life Cycle: –
Product Life Cycle
Most product life cycles are portrayed as bell-shaped curves, typically divided into four
stages: introduction, growth, maturity, and decline
• Introduction—A period of slow sales growth as the product is introduced in the market.
Profits are nonexistent , because of the heavy expenses of product introduction.
• Growth—A period of rapid market acceptance and substantial profit improvement.
• Maturity—A slowdown in sales growth because the product has achieved acceptance by
most potential buyers. Profits stabilize or decline because of increased competition.
Product & Market Modification becomes essential.
• Decline—Sales show a downward drift and profits
Dr. Anupamaa Chavan 4
Summary of Product Life Cycle Characteristics,
Objectives, and Strategies
Introduction Stage
• Because it takes time to roll out a new product, work out technical problems, fill dealer
pipelines, and gain consumer acceptance, sales growth tends to be slow in the introduction
stage. Profits are negative or low, and promotional expenditures are at their highest ratio to
sales because of the need to
• (1) inform potential consumers,
• (2) induce product trial, and
• (3) secure distribution in retail outlets. Prices tend to be higher because costs are high, and
• (4) firms focus on buyers who are the most ready to buy.
Some of the most popular products in the
development and introduction phase today are:
• Self-driving cars
• Artificial intelligence applications
• Smart glasses
• Foldable and rollable smartphones and TVs
Growth Stage
• To sustain rapid market share growth now:
• Improve product quality and add new features
• Add new models and flanker products
• Enter new market segments
• Increase distribution coverage and enter new distribution channels
• Shift from awareness and trial communications to preference and loyalty
communications
• Lower prices to attract the next layer of price-sensitive buyers
Examples of products in the growth stage
• Some of the most relatable examples of products in the growth stage are as
follows:
• Electric vehicles
• Cloud storage
• Online education
• Smartwatches
• Bluetooth wireless earphones
Maturity Stage (1 of 3)
• At some point, the rate of sales growth will slow, and the product will enter a stage of relative maturity. Most
products are in this stage of the life cycle, which normally lasts longer than the preceding ones.
• The maturity stage can be divided into three phases: slow growth, stability, and decaying maturity.
• In the first phase, sales growth starts to slow. There are no new distribution channels to fill. New competitive
forces emerge.
• In the second phase, sales per capita flatten because of market saturation. Most potential consumers have
tried the product, and future sales depend on population growth and replacement demand.
• In the third phase, decaying maturity, the absolute level of sales starts to decline, and customers begin
switching to other products. The third phase poses the most challenges. The sales slowdown creates
overcapacity in the industry, which intensifies competition. Weaker competitors withdraw. A few giants
dominate—perhaps a quality leader, a service leader, and a cost leader—and they profit mainly through high
volume and lower costs. Surrounding them are a multitude of market nichers, including market specialists,
product specialists, and customizing firms. The question is whether to struggle to become one of the big three
and achieve profits through high volume and low cost or to pursue a niching strategy and profit through low
volume and high margins. Sometimes the market will divide into low- and high-end segments, and market
shares of firms in the middle will steadily erode.
Examples of products in the maturity stage
• Some common products that have reached the maturity stage
are as follows:
• Smartphones
• Streaming services
• Laptops
• Coca-Cola
Maturity Stage (2 of 3)
• Two key ways to reverse the decline course for a company are market
growth and product modification.
• Strategies:
• Market growth
▪ Convert nonusers
▪ Attract competitors’ customers
▪ Increase usage among current users
• Increase the number of usage occasions
• Increase consumption with each occasion
• Create new usage occasions
• Market Growth. A company might try to expand the market for its mature brand by maximizing the two factors that
make up sales volume: number of users and usage rate per user.
• A company can expand the number of users through either or both of the following strategies:
Convert nonusers. This approach is also referred to as primary demand stimulation. The key to the growth of
air freight service was the constant search for new users to whom air carriers could demonstrate the benefits of
using air freight rather than ground transportation.
Attract competitors’ customers. This approach is often referred to as steal-share strategy.
A company can increase the usage rates among current users through the following strategies:
Increase the number of usage occasions. For example, Campbell’s began promoting its soups for usage in
the summer. Heinz might recommend using vinegar to clean windows.
Increase consumption on each occasion.
Create new usage occasions
Maturity Stage (3 of 3)
• Strategies:
• Product modification
▪ Quality improvement
▪ Feature improvement
▪ Style improvement
Producers also try to stimulate sales by improving quality, features, or style. Quality improvement increases
functional performance through the launch of a “new and improved” product. Feature improvement adds size,
weight, materials, supplements, and accessories that expand the product’s performance, versatility, safety, or
convenience. Style improvement increases the aesthetic appeal of the product.
Decline Stage
• Harvesting and Divesting
• Harvesting
• Divesting
• Eliminating Weak Products
Sales decline for a number of reasons, including technological advances, shifts in consumer tastes,
and increased domestic and foreign competition. All can lead to overcapacity, increased price cutting,
and profit erosion. As sales and profits decline, some firms withdraw. Those remaining may reduce the
number of products they offer, exiting smaller segments and weaker trade channels, cutting marketing
budgets, and reducing prices further. Unless strong reasons for retention exist, carrying a weak product
is often very costly.
Examples of products in the Decline stage
• Some products that are already in the decline phase are as
follows:
• Diesel vehicles
• Personal computers
• Wired earphones/headphones
• Hover-boards
• Apple iPod and other dedicated MP3 players
• CD/DVD players
Recent Trends in Marketing
• Cause-related marketing
• Ethics in Marketing
• Social Marketing
• Digital Marketing
• Green marketing
Cause-related Marketing
• Cause-related marketing is a mutually beneficial collaboration between
a corporation and a nonprofit designed to promote the former's sales
and the latter's cause
• Cause-related marketing is a marketing method where businesses align
themselves with social issues or beliefs that are important to them and
execute a campaign accordingly. Companies use the tactic to bring
awareness to a cause and show social responsibility.
• For instance, if you've ever completed a transaction with a donation to
a foundation, you've participated in a cause-related campaign.
• Consumers expect brands to be socially responsible in fact:.
• 70% of consumers want to know how brands are addressing social and environmental issues.
• 46% of consumers pay close attention to a brand’s actions.
• Cause marketing can also refer to social or charitable campaigns put on by for-
profit brands.
• Typically, a brand’s association with a nonprofit will boost their corporate social
responsibility. The nonprofit, in exchange for their ethical contributions to the
collaboration, creates more awareness for their organization.
Benefits of Cause Marketing
• Cause-related marketing increases brand awareness and exposure for
the nonprofit partner. Since nonprofits typically have a limited budget
for marketing, getting a small business or corporation to partner with
them can help get information about their efforts and their cause out
in front of consumers they might not otherwise reach. However, there
are also huge benefits to the corporate partner, including:
• Fulfilling the demand for corporate social responsibility
• Improving their corporate image
• Building a relationship with the community
• Increasing brand loyalty
• Boosting employee morale
• Standing out from the competition
Building a Successful Cause Marketing Campaign
• Identify your cause
• Determine your contribution
• Involve your audience
Cause-related marketing examples
• American Express Starts a Trend
• American Express introduced the term of cause-related marketing to the mass
market in 1983 to characterise their effort to generate funds for the
restoration of the Statue of Liberty. American Express donated one cent to
the restoration effort for each charge card transaction.
• Tata Salts
• 10 paisa for each kilogram of tata salts purchased is donated to CRY's child
education initiative for malnourished children (child relief & you)
• [Link]
• [Link]
Ethics in Marketing
• Marketing ethics is about being honest, fair and respectful when
selling products or services. It means not lying or tricking people into
buying things and treating them with respect and dignity. Unethical
marketing not only harms customers and society in the long run but
also ruins the company's reputation and puts its existence under
threat.
• Marketing ethics refers to the principles and values that guide the behavior
of marketers, emphasizing honesty, responsibility, fairness, and respect for
consumers and society.
• While marketing ethics refers to the principles and values that guide
the behavior of marketers, ethical marketing specifically relates to
promotional ethical marketing practices.
• An example of ethical marketing is fair pricing and advertisements
that do not exaggerate the benefits of the promoted
product. Unethical marketing practices may include sharing customer
information without consent, making untrue claims about the
product, or targeting emotionally vulnerable customers.
Ethical Marketing Principles
• Transparency - An ethical marketing campaign will reveal all truths about the
products to the customer, including ingredients, components, and production
processes.
• Customer data protection - Ethical marketers don't disclose customer
information without consent. The information collected is only used to benefit
the customers, e.g. recommending products that match their previous purchases.
• Human rights compliance - Marketing campaigns should not offend certain
population groups by criticizing their mistakes or flaws.
• Sustainability - With environmentalism on the rise, companies should show how
their products are sustainable and ethically produced in marketing campaigns.
• Customer value - Ethical marketing should aim to bring as much value to the
customer as possible while limiting societal risks.
Benefits of Ethical Marketing
• Improve Sales
• Customers are more likely to return and make more purchases if the product has fair pricing and good quality,
resulting in recurring income for the company. They will also recommend friends and family who might
become the business's potential customers.
• Build Customer Loyalty
• People are averse to lies and trickery. A company can make fraudulent claims to get more sales, but as soon as
customers realise they are being lied to, they will turn against the business and never purchase from it again.
The only way to win customer loyalty is to be authentic by delivering the exact products and services as
advertised.
• Attract and Retain Talents
• Businesses associated with good causes and social issues are more appealing to jobseekers as people not only
look for a job with a good salary but one that makes the world a better place. Companies that maintain
marketing ethics also have a higher retention rate, as their employees don't experience the guilt of lying to
customers.
• Maintain Interest of Stakeholders
• Ethical marketing practices increase employees', shareholders', and partners' confidence in the business and
convince them to continue investing in or maintaining the relationship with the company.
Importance of Ethics in Marketing
• It helps avoid legal and reputational risks.
• It builds customer trust and credibility, leading to increased loyalty,
customer retention, and brand reputation.
Example
• The Body Shop's "Forever Against Animal Testing" campaign
• The Body Shop launched the "Forever Against Animal Testing" campaign in
2017, which aimed to end animal testing in the cosmetics industry. The
company was open about the fact that many cosmetic ingredients are still
tested on animals, despite the availability of alternative methods. The
campaign encouraged customers to sign a petition to ban animal testing in
the industry and raised awareness about the issue
• [Link]
• [Link]
SOCIAL MARKETING
• Social marketing is an approach used to develop activities aimed at
changing or maintaining people’s behaviour for the benefit of
individuals and society as a whole.
Examples of Social Marketing
• Anti-Smoking
• Forest Fire Prevention
• Recycling
• Handicap Accessibility
• Advantages
• It gives businesses a competitive advantage. Consumers want to purchase
goods from ethical and socially accountable firms. These trends will gain
appeal as campaigns and concerns around social and ecological issues
expand.
• A further benefit is the premium pricing. Businesses transform their social
and environmental initiatives into distinct selling factors, enabling them to
charge greater prices.
• Promotes health awareness and facilitates the adoption of a healthy lifestyle.
• It contributes to green marketing efforts.
• It contributes to eradicating social ills that harm society and people’s lives.
• Disadvantages
• It is not uncommon for commercial marketing to be conducted under the
pretext of social outreach marketing.
• Creativity may sometimes be problematic since it forces the listener to
interpret the message for themselves, and the interpretation may not be
particularly assertive.
• There are occasions when the notion of such marketing is not seen as an
adequate mass communication theory.
[Link]
Digital Marketing
• Digital marketing, also called online marketing, is the promotion of
brands to connect with potential customers using the internet and
other forms of digital communication. This includes not
only email, social media, and web-based advertising, but also text and
multimedia messages as a marketing channel
Types of digital marketing
• Search engine optimization
• Content marketing
• Social media marketing
• Pay-per-click marketing
• Influencer marketing
• Email marketing
• Mobile marketing
• [Link]
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The benefits of digital marketing
• A broad geographic reach
• Cost efficiency
• Quantifiable results
• Easier personalization
• More connection with customers
• Easy and convenient conversions
Green Marketing
• Green marketing is the marketing of environmentally friendly products and services.
• It is becoming more popular as more people become concerned with environmental issues and decide that
they want to spend their money in a way that is kinder to the planet.
• Green marketing can involve a number of different things, such as creating an eco-friendly product, using eco-
friendly packaging, adopting sustainable business practices, or focusing marketing efforts on messages that
communicate a product’s green benefits.
• This type of marketing can be more expensive, but it can also be profitable due to the increasing demand.
• For example, products made locally in North America tend to be more expensive than those made overseas
using cheap labor, but they have a much smaller carbon footprint because they don’t have to fly across the
globe to get here.
For some consumers and business owners, the environmental benefit outweighs the price difference. LOHAS
• Consumers who prefer to purchase green products even though they might be more expensive fall into the
‘LOHAS’ category.
• LOHAS stands for Lifestyles of Health and Sustainability.
• “LOHAS describes an integrated, rapidly growing market for goods and services that
appeal to consumers whose sense of environmental and social responsibility influences
their purchase decisions.”
• These consumers are active supporters of environmental health and are the heaviest
purchasers of green and socially responsible products. They also have the power to
influence other consumers.
Green Marketing Methods
• Beyond making an environmentally friendly product, business owners can do other
things as part of their green marketing efforts. The following can all be part of a green
marketing strategy:
• Using eco-friendly paper and inks for print marketing materials
• Skipping the printed materials altogether and option for electronic marketing
• Having a recycling program and responsible waste disposal practices
• Using eco-friendly product packaging
• Using efficient packing and shipping methods
• Using eco-friendly power sources
• Taking steps to offset environmental impact
Examples of Green Marketing
1. Hindustan Petroleum:
• Hindustan Petroleum owns a massive e-waste recycling plant, where enormous
shredders and granulators reduce four million pounds of computer detritus each month
to bite-sized chunks the first step in reclaiming not just steel and plastic but also toxic
chemicals like mercury and even some precious metals.
• HP will take back any brand of equipment; its own machines are 100 percent recyclable. It
has promised to cut energy consumption by 20 percent by 2010.
2. The Body Shop
• The famous cosmetics brand fights cruelty by campaigning against animal testing and selling
100% vegetarian products.
• This brand is considered the first international cosmetics company to champion a cruelty-free
policy.
• [Link] (5.22 Min)
3. Johnson & Johnson
• Is the second largest corporation user of Solar Power in United States, and has been working
consistently over the past 20 years to reduce production wastes.
• In Jan 2011, it launched a business plan to become the most environmentally responsible
company in the World.
Green Washing
• Some marketers try to capitalize on the growing number of green consumers by simply taking a
green marketing approach to products that might not otherwise be considered green.
• They try to position their products as a better choice for the environment when they’re really not.
• An example of this is when a company uses the color green in their packaging, or the word
green somewhere in their messaging, when there isn’t anything particularly eco-friendly about
their product, nor it’s not more eco-friendly than competing products.
• Green-washing is not only misleading, but it can also be damaging to a company’s reputation.
• If consumers want to be certain they are indeed buying a green product, they should look for
official certifications listed on the product packaging.
• [Link]