Core Concepts of Marketing

160 CHAPTER 7 INTRODUCINGANDMANAGINGTHEPRODUCT

aimingatsuburbanitesandwomenfarmers.Theyhaveintroduceda seriesofredesigned

lawnandgardentractors,tillers,andsnowblowersthatareeasierforwomentooperate.

Althoughthisrepresentsa limitedselectionofobjectives,it doessuggestthatthere

mustbea reasonforallproduct-relatedactivities.Thesereasonsarebestexpressedinthe

formofspecificobjectives.

TheProduct Plan

Oncea marketerhasdetermineda setofproductobjectives,it isthenpossibletoinitiate

theactivitiesthatconstitutetheproductplan.Althoughtherearea numberofwaystolook

atthisprocess,wehaveelectedtoexplainthisprocessthroughtheproductlifecyclecon-

cept(PLC).ItshouldbenotedthatthevalueofthePLCframeworkasa planningtoollies

attheindustryand/orproductcategorylevel.

TheProductLifecycle

A companyhastobegoodat bothdevelopingnewproductsandmanagingthemintheface

ofchangingtastes,technologies,andcompetition.Evidencesuggeststhateveryproductgoes

througha lifecyclewithpredictablesalesandprofits,asillustratedinFigure7.3.Assuch,

themanagermustfindnewproductstoreplacethosethatareinthedecliningstageofthe

productlifecycleandlearnhowtomanageproductsoptimallyastheymovefromonestage

tothenext.

ThefivestagesofthePLCandtheircomponentscanbedefinedasfollows:

1. Productdevelopment:theperiodduringwhichnewproductideasaregenerated,
   operationalized,andtestedpriortocommercialization.


2. Introduction:theperiodduringwhicha newproductis introduced. Initialdistri-
   butionisobtainedandpromotionis obtained.


3. Growth:theperiodduringwhichtheproductisacceptedbyconsumersandthe
   trade.Initialdistributionisexpanded,promotionis increased,repeatordersfrom
   initialbuyersareobtained,andword-of-mouthadvertisingleadstomoreandmore
   newusers.

SALES/PROFITS($)

SALES

PROFITS

o-==:::PRODUCT:::===t;:;;;;;:;~~~t"~==~t-~=-==---=~::~:-MATURITY t---TIME

DEVELOPMENT TIME

STAGE

FIGURE1. 3 Theproductlifecycle