“Product life cycle”

Course name: Food Marketing and Consumer Behaviour

Course code: FTNS_5203
Group no: 01

Presented To Presented By
1. Rabeya Sultana Eva
BFH2208MSc101F
Supriya Ghosh
Assistant Professor, 2. Md Muhaiminul Islam
Dept. of Food Technology and ASH2208MSc103M
Nutrition Science, NSTU
3. Arman Hossain Patwary
ASH2208MSc104M

4. Nurul Azim Sojib

ASH2208MSc105M
 Product Life
Cycle
A group of stages where a
product goes through from its
introduction to its decline in
the market
 Stages of Product Life Cycle

The product life cycle Involves phases

named:
1. Introduction
2. Growth
3. Maturity
4. Decline

The introduction stage of Product Life Cycle There are four key strategies that companies
can use, based on a combination of pricing
 It is the first phase when a new product
and promotional approaches:
is launched into the market.
 In this stage, companies aim to build  Rapid Skimming
awareness, generate initial sales, and  Slow Skimming
establish a market presence.  Rapid Penetration &
 Slow Penetration.
Rapid Skimming Strategy
Objectives:
01 Maximize profits quickly by charging a high price while
spending heavily on promotion.

Conditions:
02 Pricing: High price.
Promotion: High promotional expenditure to accelerate product
awareness.

When to Use:
This strategy is used when the market is relatively small, and the product is
03 highly differentiated or innovative, and there are few competitors. The high price
recovers R&D costs quickly, while aggressive promotion creates awareness.

Example:

04 Luxury tech gadgets (e.g., a new iPhone) are often

launched at a high price with significant marketing to
build hype and awareness.
 Rapid Skimming Strategy
Advantages:
 Maximizes revenue from early adopters
willing to pay a premium. Helps recover
R&D costs quickly.

Disadvantages:
 Limits the initial market size and may
attract competitors faster. Risk of alienating
price-sensitive customers.
Slow Skimming Strategy
Objectives:
01 Maximize profits over a longer period by maintaining high
prices but limiting promotional efforts.

Conditions:
02 Pricing: High price.
Promotion: Low promotional expenditure to reduce costs..

When to Use:
This strategy works when the target market is limited, and customers are willing
03 to pay premium prices due to the product’s uniqueness, but the company doesn’t
want to spend much on promotion.

Example:

04 Luxury products or niche products like high-end watches

or exclusive furniture often use this strategy.
 Slow Skimming Strategy

Advantages:
 Sustains high profit margins over a
longer period, can build a strong
brand image.

Disadvantages:
 Slower market penetration and higher risk if
the product doesn’t achieve desired sales
volume.
Rapid Penetration Strategy
Objectives:
01 Gain market share quickly by charging a low price and
heavily promoting the product.

Conditions:
02 Pricing: Low price
Promotion: High promotional expenditure to quickly gain market
share.

When to Use:
This strategy is used when the market is large, and the company seeks to
03 capture market share quickly before competitors can respond. The low price
stimulates demand, while high promotion builds rapid awareness.

Example:

04 Mass-market consumer products like streaming services

(e.g., Netflix or Spotify) often use this approach, offering
low prices with heavy promotion to rapidly gain a large
customer base.
 Rapid Penetration Strategy

Advantages:
 Quickly builds a large customer base,
discourages competitors, and
establishes market presence.

Disadvantages:
 Lower profit margins initially, and it may be
difficult to raise prices later without losing
customers.
Slow Penetration Strategy
Objectives:
01 Gain market share gradually by offering a low price with
minimal promotional expenditure.

Conditions:
02 Pricing: Low price.
Promotion: Low promotional expenditure to control costs.

When to Use:
This strategy is suitable when the product is familiar or doesn’t need much
03 promotion,price-sensitive customers, but the company doesn’t want to invest
heavily in advertising.There is minimal competition, allowing the company to
grow slowly.

Example:

04 Everyday consumer goods, like store-brand items, where

price is important, but the need for aggressive promotion
is low.
 Slow Penetration Strategy

Advantages:
 Allows for steady market growth and
adjustment based on customer
feedback and market conditions.

Disadvantages:
 Slow revenue growth and potential issues
with perceived value and brand positioning.
 2. Growth Stage

Key Characteristics of the Growth Stage

Rapid Sales
01 Growth

02 Increasing Market
Share
Growing
03 Customer Base
Enhanced Product
04 Features
Economies of
05 Scale

Emerging
06 Competition
Strategies for the Growth Stage

Refining and improving the product,

Product Differentiation introducing variations, and adding new
& Improvements features

Aggressive marketing to reach more

Market Penetration customers and increase market
share

Geographic Expansion: Expand the product to new

regions or international markets

Setting up price to attract price-

sensitive customers and fend off
Pricing Strategy competition.

Customer Retention Establish loyalty programs or

subscription services to retain
Programs
customers
Challenges in the Growth Stage

1. Increased Competition: Competitors will enter the market,

offering similar or improved products, creating a need for
differentiation.
2. Balancing Supply and Demand: The company needs to ensure
that production can keep up with rising demand without
compromising on quality.
3. Price Pressures: The entry of competitors often leads to
pricing pressure, requiring careful pricing strategies to balance
profit margins and market share.
Examples of Product in Growth Stage

Electric Vehicle
Tesla, Rivian and Lucid

Smart Home Devices

Amazon Echo, Google Home

Wearable Technology
Apple Watch and Fitbit

Health & Fitness Apps

My Fitness Pal, Peloton, and Headspace

Streaming Services
Disney+, HBO Max
 3. Maturity Stage
(An Overview of Characteristics, Strategies, and Challenges)

Characteristics of the Maturity Stage:

1 Market Saturation

2 Intense Competition

3 Slower Sales Growth

4 Peak Profits, Potential Decline

5 Focus on Differentiation and Innovation

6 Market Segmentation and Customization

 Strategies for Managing the Maturity Stage

3. Enhancing
2. Price Customer 4. Expanding 5. Cost 6. Product
1. Product Adjustments Loyalty Market Reach Reduction and Line
Differentiation (Discounts, (Loyalty (New Markets, Efficiency Extensions
Promotions) Channels) Improvements (New Variants)
Programs)
 Challenges in the Maturity Stage

2.
Increasing Competition
and Price Wars

1.
Maintaining
Market Share

3.
Avoiding Product
Obsolescence
 Examples of Products in Maturity Stage

Smartphones: Apple, Samsung

Soft Drinks: Coca-Cola, PepsiCo
Automobiles: General Motors, Toyota

References
•Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.)
•Anderson, C. R., & Zeithaml, C. P. (1984). Academy of Management Journal
•Levitt, T. (1965). Harvard Business Review
•Rink, D. R., & Swan, J. E. (1979). Journal of Business Research
 4. Decline stage
Key characteristics of “Decline stage” :

1. Decreasing sales 2. Falling profits 3. Market satura-

tion
Sales volume drops Profit margin
significantly due to shrinks. Reduced poten-
superior alterna- tial buyers.
tives.

4. Increased 5. Reduced mar- 6. Limited distri-

competition keting bution
Competitors may With the reduction of
offer advanced or Companies cut pro-
motion cost due to demand manufacturers
cost effective may scale down distri-
products. sell reduction. bution.
 Challenges in the Decline Stage

1. Managing the Legacy 2. Brand Erosion: 3. Product Cannibalization:

Customers:
If a declining product overstays New products launched to replace
Customers who still use the in the market, it could harm the the old one may cannibalize the
product may require continued overall brand perception, market for both, leading to
support, which can add costs especially if the product fragmented sales.
despite the product’s dwindling becomes synonymous with
profitability. obsolescence.
 Strategic Options in the Decline Stage to increase product life

1. Harvesting 3. Product Rejuvenation or

Objective: Maximize short-term profits Repositioning
while minimizing expenses. Objective: Extend the product's life cycle by
refreshing or reintroducing it with new features or
Strategy: Company reduces production, targeting a new market.
marketing, and other expenses but continues
selling the product as long as it remains Strategy: Company invests in innovations,
profitable. No major investments are made in rebranding, or product upgradation to attract new
the product. customers or re-engage existing ones. This can
include adding new features, improving quality,
or shifting marketing to highlight new uses.

2. Discontinuation (Divestment
or Product Elimination) 4. Niche Marketing
Objective: Cut losses by removing the Objective: Focus on a small, profitable
product from the market. segment of the market that still values the
product.
Strategy: The product is phased out or
abruptly discontinued. This is common when Strategy: The product is repositioned to serve
maintaining a product becomes unprofitable. a niche market that may still find it useful or
Companies may offer remaining stock at attractive.
deep discounts to clear inventory. This strategy often involves reducing distribution
and focusing on specialized segments or
regions.
Thank You