Product life-cycle strategies

It is not a surprise that we talk about the product life cycle. It describes the story of a product, from the development to the decline. For some product, the lifecycle can be determined in advance. For a company to launch a new product, the company must first be sure that the product is going to sell in order to hope for a good margin. We can find 5 different steps.

The first step is product development. It starts when a new company arrives and develops a new product idea. Sales are null and costs are already beginning to appear.
The second step is the introduction. It represents a period of slow sales growth. The product is introduced to the market. You may encounter heavy expenses at this stage, and no income.
The third is a period of growth, with a rapid market acceptance and increasing profits.
After this growth, generally, the product reaches its maturity. There is a slowdown in sales growth. The product has been accepted by most buyers. Depending on the competition profits, level may increase or decrease.
Finally, at the end of the product lifecycle, the decline sets the decrease of sales and profits.
Another way to describe a product life cycle is to define the type of trend that the product is defining. A new product can be following a style, a fashion, or can describe fads. A style is a long life cycle, it has different period of renewed interest. As a result the style doesn’t die. It can be applied to important products, day to day product, for example the architecture, furniture, or clothing.
A Fashion grows slowly, remains on top for a while, and decreases slowly. A fashion will be accepted during a set period of time, then will be disappearing little by little.
Fads are specials. They describe very short life cycles, with very high sales. This is driven by an unusual customer enthusiasm for the product, which doesn’t last long. Products in fads are products that attract the attention, but are not sufficiently solid to live longer.

How to design a new product?

When a company is designing a new product, it has to go through eight phases which will help it launch a successful product. In order to launch a product, the firm must know its customers, and deliver superior value to customers.

The first point is the idea generation. Before finding the right idea, the company has to go through lots of ideas. These are internal idea sources, when they come from the employees of the company, external, when they come from distributors, suppliers or another company, and ideas can be crowdsource, when it comes from the customer itself. In crowdsourcing, the more people are involved, the better the project.

After that you must be able to visualize all your ideas in order to reduce the amount. At this point, marketers have to write a summary about the idea. This write-up describes the product, the customer value proposition, the target market, and the competition. In this document, you also find estimation of market size, product price, development time and costs, manufacturing costs and rate of return. This goes in front of a committee who will assess the RWW. The real- win- worth doing. Is the value real, what will the company be able to sustain the product, and does the product shows enough potential. The idea that answers yes to these questions have more chances to be received.

Then the firm must work on the idea and develop a product concept which will be a detailed version of the product. Here the concept should be able to define every aspect of the product and propose multiple versions of it which will be soon tested to see if their reliability on the market is verified. Groups of target customers are chosen and will give their first impression of the concept.

During the next phase, which is the marketing strategy development, will design a simple marketing strategy for the product which will introduce it to the market. All this is described in the marketing strategy statement.

Once the product marketing statement has been ratified, the business analysis can be conducted. During the business analysis every financial aspect is being forecasted in order to find out if the product is valid.

During the product development, the investments are being made, and the product will soon be developed by the R&D teams. This will create a first prototype. As a matter of fact, tests a conducted to be sure that the product remains viable to the consumers.

After this phase comes the test marketing phase, when the whole product is test, from the starting point to the whole marketing process. This can take years before a company is definitely sure about the new product it is launching.

Finally, at the commercialization phase, the company decides on the timing to when to launch the new product. The company will face high cost so the product must be launched at time, depending on competitors, suppliers, distributors.

Product line and product mix

Two major point are important in Marketing. When we talk about a product, there’s a need for a definition, a way to say how the product will be, and how it will be placed compared to other products. As a result, we talk about the product line and the product mix.

The product line is a way to refer to products when they are similar on different factors. Product can have a similar function, they target the same customers, the can have the same marketing or they follow the same price range. The product line length defines the number of items in the product line. The global performance of the product line is impacted by each and every item. Sometimes marketing strategist have to define a product line strategy by adding products to the line or by removing a product from the line.

We can figure out two different strategies for the product line. Product line filling and product line stretching. When you fill the product line, you add product within the range of your current product line. This way you can prevent competition and find profit. The product line stretching happens when the company decides whether to add a product at the upper or at the lower end of the range. This is a good away to attract t new competitors or to respond to a competitor’s attack.

We talk about the product mix when a company has different types of product. The product mix will define the whole panel that the company is offering in store. We can define it in terms of width, length, depth and consistency. We can also call it a product portfolio.

A product width will define the number of lines a company is carrying. The company can sell a whole product mix, and in it different kinds of products.

The product length expresses the number of product that we have within a specific line of product. For example a line can have many brands selling the same product.

The depth is when you sell different version of your product within the same line. It’s the same product but the features you are selling with the product are not the same.

The consistency is the coherence of the product mix. If the product inside the product mix are closely related to one another, the product mix is consistent or coherent. If the products of the product mix differ from one another, the product mix is incoherent, inconsistent.