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This document provides information about a college project on product life cycles. It discusses: 1) The team members and faculty guide for the project which is being conducted at Vasireddy Venkatadri Institute of Technology. 2) It introduces the concept of a product life cycle and describes the four main stages of introduction, growth, maturity, and decline. 3) It then discusses how companies can develop strategies to manage a product's life cycle and extend its time in the market.

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Tummeti Sujith
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55 views17 pages

Batch - 1 Eem

This document provides information about a college project on product life cycles. It discusses: 1) The team members and faculty guide for the project which is being conducted at Vasireddy Venkatadri Institute of Technology. 2) It introduces the concept of a product life cycle and describes the four main stages of introduction, growth, maturity, and decline. 3) It then discusses how companies can develop strategies to manage a product's life cycle and extend its time in the market.

Uploaded by

Tummeti Sujith
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Title of the project

► COLLEGE NAME - Vasireddy Venkatadri Institute of Technology


► FACULTY GUIDE DETAILS - Dr. K. V. L. Somasekhar
► TEAM MEMBER DETAILS - 1. PRASHANT SINGAMSETTI (20BQ1A04D4)
2. P V K MANIKANTA SAI (20BQ1A04D6)

3. SAGI SREEVIBHU (20BQ1A04E6)


4. THOTA DANIEL ANEESH JOY (20BQ1A04H0)
5. UPPALAPATI MARIYA BABU (20BQ1A04H5)
Introduction - 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. A product’s life cycle is usually broken
down into four stages; introduction, growth, maturity, and decline.
How does it work ?

As mentioned above, there are four stages in a product’s life cycle - introduction, growth, maturity, and decline –
but before this a product needs to go through design, research and development. Once a product is found to be
feasible and potentially profitable it can be produced, promoted and sent out to the market. It is at this point that
the product life cycle begins.
Stages

There are four stages of a product’s life cycle, as follows:

1. Market Introduction and Development


This product life cycle stage involves developing a market strategy, usually through an investment in advertising and
marketing to make consumers aware of the product and its benefits.
At this stage, sales tend to be slow as demand is created. This stage can take time to move through, depending on the
complexity of the product, how new and innovative it is, how it suits customer needs and whether there is any
competition in the marketplace.
A new product development that is suited to customer needs is more likely to succeed, but there is plenty of evidence
that products can fail at this point, meaning that stage two is never reached. For this reason, many companies prefer
to follow in the footsteps of an innovative pioneer, improving an existing product and releasing their own version.
2. Market Growth
If a product successfully navigates through the market introduction it is ready to enter the growth stage of the
life cycle. This should see growing demand promote an increase in production and the product becoming more
widely available.
The steady growth of the market introduction and development stage now turns into a sharp upturn as the
product takes off. At this point competitors may enter the market with their own versions of your product –
either direct copies or with some improvements. Branding becomes important to maintain your position in the
marketplace as the consumer is given a choice to go elsewhere. Product pricing and availability in the
marketplace become important factors to continue driving sales in the face of increasing competition. At this
point the life cycle moves to stage three; market maturity.
3. Market Maturity
At this point a product is established in the marketplace and so the cost of producing and marketing the existing
product will decline. As the product life cycle reaches this mature stage there are the beginnings of market
saturation. Many consumers will now have bought the product and competitors will be established, meaning
that branding, price and product differentiation becomes even more important to maintain a market share.
Retailers will not seek to promote your product as they may have done in stage one, but will instead become
stockists and order takers.
3. Market Decline
Eventually, as competition continues to rise, with other companies seeking to emulate your success with
additional product features or lower prices, so the life cycle will go into decline. Decline can also be caused by
new innovations that supersede your existing product, such as horse-drawn carriages going out of fashion as
the automobile took over.
Many companies will begin to move onto different ventures as market saturation means there is no longer any
profit to be gained. Of course, some companies will survive the decline and may continue to offer the product
but production is likely to be on a smaller scale and prices and profit margins may become depressed.
Consumers may also turn away from a product in favour of a new alternative, although this can be reversed in
some instances with styles and fashions coming back into play to revive interest in an older product.
Product Life Cycle Strategy and Management

Having a properly managed product life cycle strategy can help extend the life cycle of your product in the market.
The strategy begins right at the market introduction stage with setting of pricing. Options include ‘price skimming,’ where
the initial price is set high and then lowered in order to ‘skim’ consumer groups as the market grows. Alternatively, you can
opt for price penetration, setting the price low to reach as much of the market as quickly as possible before increasing the
price once established.
Product advertising and packaging are equally important in order to appeal to the target market. In addition, it is important to
market your product to new demographics in order to grow your revenue stream.
Products may also become redundant or need to be pivoted to meet changing demands. An example of this is Netflix, who
moved from a DVD rental delivery model to subscription streaming.
Understanding the product life cycle allows you to keep reinventing and innovating with an existing product (like the
iPhone) to reinvigorate demand and elongate the product’s market life.
Examples

1. Type Writers
2. Video Cassette Recorders (VCRs)
3. Electric Vehicles
4. AI Products
Conclusion

Understanding how a product’s life cycle works allows companies to work out whether their products are
meeting the needs of the target market and, thereby, when they may need to change focus or develop something
new.
Examining a product in relation to market needs, competition, costs and profits allows a company to pivot their
product focus to maintain longevity in the marketplace.
Knowing when a product is going into decline prevents your company from following as a result of being overly
reliant on a fading market. A product life cycle strategy means that you can reinvigorate an existing product,
develop a new replacement product or change direction to stay abreast of a changing marketplace.
While all products have a life cycle, many of the most successful ones are able to maintain the mature stage of
the life cycle for many years before any eventual decline.
Channels of Distribution

Definition: The word ‘distribution’ means the allocation of something to


its recipients. Hence, the term, ‘channels of distribution refers to the
various mediums used for the purpose of distribution.
Types of Channels of Distribution

Channels of Distribution implies the means through which the good or service need to pass to reach the
intended consumer. Based on the number of intermediaries involved, the channel of distribution can be short
or long. Further, it has a great impact on the company’s sales, as the higher the availability of the goods, the
more will be its sales.

Depending on the type of the product, i.e. good or service, different marketing channels are employed by the
companies.
Direct Channel

Prior to reaching the hands of the consumers, goods and services pass through various hands. However, there
are certain instances when the producer sells goods directly to their customer, then such a channel is known as
a direct channel.

Example: Consultancy firms, Passenger and freight transport services, banks, etc.
Indirect Channel
When the producer produces goods on a large scale, it is difficult to make direct selling of the goods to the
customers. In this way, middlemen come into the picture to ensure the availability of the goods to its customers. It
may include wholesalers and retailers. So, we can say that when there are a host of intermediaries involved in the
distribution process, it amounts to the indirect channel of distribution.
Hybrid Channels

The combination of the direct channel and indirect channel is called the hybrid channel of distribution. When
the manufacturer uses more than one channel to reach the final consumer, it is said to be using the hybrid
channel. This attracts more consumers and facilitates more sales.
Functions of Channel of Distribution
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