Product Life Cycle

The Product Life Cycle

The product life cycle is the series of stages that a product goes through over its lifetime. Not all products last forever. They start somewhere and most products and services experience a fall in sales after a certain period of time. The stages of the product life cycle are:

Research and development

Research and development is the stage before a product has actually been made.
Businesses will invest in researching a certain area of the market and if they discover a business opportunity, they may then take the time and resources to develop a product or service that fits a gap in the market.
- A pharmaceutical company may invest into researching a certain disease to see if there is a drug that might help cure it.

Introduction

The introduction is the stage where a business introduces or launches the new product (or service) to the market.
Marketing and advertising are important in this stage of the product life cycle because a business needs to find a way to let consumers know what the product is and that the product exists.

Growth

Successful products often undergo a period of growth as more and more customers discover and buy the product.
In the early days, just after introduction, the rate of growth tends to increase.

Maturity

At this stage, the number of new customers buying the product has slowed down and the market for the product can be considered mature.
But sales of the product are still rising, just less quickly than before (they are rising at a decreasing rate).
- People grow a lot less between the ages of 13 and 18 when compared to age 1 and 6.

Saturation

At this stage, the sales of the product have reached its peak and no longer increase but remain steady.
Essentially all consumers who want the product or service have bought or acquired it.

Decline

Changes in fashion, consumer tastes/preferences, technological advances and new competition offering similar products can all mean that the demand for a product begins to fall.

Extension Strategies

To try to prevent or delay (postpone) a product (or service) from reaching the stage where sales start to decline, businesses can try different extension strategies.

Update packaging or rebranding

Updating packaging can help to keep a product fresh in consumers’ minds. This is a common way that businesses try to keep consumers’ interest in a product.
- For example, Coca Cola have put people’s names and the names of places on their bottles of Coca Cola and Diet Coke.
- In 2002, British Airways spent £60m rebranding its brand and products. It changed the logos on its planes and changed the business’ strapline.

Adding more/different features

Adding more or different features can keep people interested.
- The FIFA video game was first released in 1993. Every year, EA Sports update the game to have better new features. This can attract new customers and help keep existing customers.
- Chocolate manufacturers often do this to increase sales. Wispa was a successful product, so Cadbury launched Wispa Gold (which contained caramel).

Changing the target market

Businesses can target new markets in an attempt to keep demand (and sales) high. Businesses can enter the same market in a different country or target a different age range in the same country.
- In 2014, the sports brand, UnderArmour won a Marketer of the Year award for its “I will what I want” campaign targeted at women.

Advertising

Heavily advertising a product can help to keep the demand for a product high. New advertising campaigns can also help to change the product image slightly and attract different customers.
Lots of companies pay £3.5m for a 30 second advert that is shown on US TV during the Superbowl. These adverts can reach an audience of over 110m people. In the UK at peak times (7pm - 9pm), a 30 second advert usually costs between £10,000 and £30,000.

1Enterprise & Entrepreneurship

1.1The Dynamic Nature of Businesses

1.1.1The Dynamic Nature of Businesses

1.1.2Risk & Reward

1.1.3The Role of Business Enterprise

1.1.4The Role of Business Enterprise 2

1.1.5The Role of the Entrepreneur

1.1.6End of Topic Test - Dynamic Nature of Business

1.1.7Grade 9 - Dynamic Nature of Business

1.2Spotting a Business Opportunity

1.2.1Customer Needs

1.2.2Market Research

1.2.3Market Segmentation

1.2.4The Competitive Environment

1.2.5Primary & Secondary Market Research

1.2.6End of Topic Test - Business Opportunities

1.2.7Application Questions - Business Opportunities

1.2.8Exam-Style Questions - Market Segmentation

1.3Putting a Business Idea into Practice

1.3.1Business Aims

1.3.2Business Objectives

1.3.3Business Revenues & Costs

1.3.4Costs - Calculations

1.3.5Revenue - Calculations

1.3.6Business Profits & Break-Even Analysis

1.3.7Profits & Losses - Calculations

1.3.8Interest - Calculations

1.3.9Cash & Cash Flow

1.3.10Cash & Cash Flow 2

1.3.11Cash Flow - Calculations

1.3.12Sources of Business Finance

1.3.13End of Topic Test - Business in Practice

1.3.14Grade 9 - Business in Practice

1.3.15Exam-Style Questions - Business in Practice

1.4Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses

1.4.2Limited Liability

1.4.3Franchising & Not-For-Profits

1.4.4Business Location

1.4.5The Marketing Mix

1.4.6Business Plans

1.4.7End of Topic Test - Effective Business

1.4.8Application Questions - Effective Business

1.4.9Exam-Style Questions - Business Plans

1.5Business Stakeholders

1.5.1Business Stakeholders

1.5.2Technology & Business

1.5.3Legislation & Business

1.5.4Legislation & Business 2

1.5.5The Economy & Business

1.5.6External Influences

1.5.7End of Topic Test - Business Stakeholders

1.5.8Grade 9 - Business Stakeholders

2Building a Business

2.1Growing the Business

2.1.1Business Growth

2.1.2Finance

2.1.3Changes in Business Aims & Globalisation

2.1.4Ethics & Business

2.1.5The Environment & Business

2.1.6End of Topic Test - Growing a Business

2.1.7Application Questions - Growing a Business

2.1.8Exam-Style Questions - Business Growth

2.2Making Marketing Decisions

2.2.1Product

2.2.2Product Life Cycle

2.2.3Price

2.2.4Pricing Methods

2.2.5End of Topic Test - Product & Price

2.2.6Grade 9 - Product & Price

2.2.7Promotion & Advertising

2.2.8PR & Sales Promotions

2.2.9Sponsorship & Product Placement

2.2.10Promotional Mix

2.2.11End of Topic Test - Promotion

2.2.12Application Questions - Promotion

2.2.13Exam-Style Questions - Promotional Mix

2.2.14Place & Wholesalers

2.2.15Direct to Consumer

2.2.16E-commerce & M-commerce

2.3Making Operational Decisions

2.3.1Job Production

2.3.2Batch & Flow Production

2.3.3Working with Suppliers

2.3.4Effective Supply Chains

2.3.5Just In Time & Just In Case

2.3.6Managing Quality

2.3.7Total Quality Management

2.3.8The Sales Process

2.3.9End of Topic Test - Operational Decisions

2.3.10Grade 9 - Operational Decisions

2.3.11Exam-Style Questions - Managing Stock

2.4Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions

2.4.2Gross Profit - Calculations

2.4.3Net Profit - Calculations

2.4.4Rate of Return

2.4.5Rate of Return - Calculations

2.4.6Research & Financial Data

2.4.7Marketing Data

2.4.8Percentage Change - Calculations

2.5Making Human Resource Decisions

2.5.1Organisational Structures

2.5.2Organisational Structures 2

2.5.3Recruitment

2.5.4Effective Recruitment

2.5.5Training a Workforce

2.5.6Motivating a Workforce

2.5.7End of Topic Tests - Human Resources

2.5.8Application Questions - Human Resources

2.5.9Exam-Style Questions - Human Resources

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