Product Decisions

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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.

The Boston Matrix

The choice of marketing mix may depend on a product’s location in the Boston Matrix.

The Boston Matrix

Types of product in the Boston Matrix

A dog product has a low market share and is in a market of low growth, for example DVD and CD discs.
A cash cow product has a high market share and is in a market of low growth, for example Apple TV products.
A star product has a high market share and is in a market of high growth, for example new iPhone smartphones.
A question mark product has a low market share and is in a market of high growth.

Factors influencing decisions on the marketing mix

The business’ marketing objectives may affect decisions made about the marketing mix.
The target market may affect decisions made about the marketing mix.
The presence and size of competitors may affect decisions made about the marketing mix.
The type of product may affect decisions made about the marketing mix, for example whether the product is a convenience good.