How to extend the product life cycle. Ways to extend the product life cycle. With t.z. pricing

Concept life cycle goods

The concept of "product life cycle" (LCT) is one of the most popular concepts in marketing. According to this concept, the life cycle of a product consists of five distinct stages:

(1) Product development. At this stage, the company finds and implements new idea goods. During this time, sales are zero, and costs rise as the final stages of the project approach.
(2) Introduction to the market. This stage is accompanied by a slow growth in sales volume. There is no profit due to the high costs of marketing activities.
(3)Height. The period of rapid market conquest and increase in profits.
(4) Maturity. At this stage, sales growth slows down, as the bulk of potential buyers have already been attracted. The level of profit remains unchanged or decreases due to an increase in the cost of marketing activities to protect the product from competition.
(5) Decline. There is a decline in sales and a reduction in profits.

Methods for extending the life cycle of a product

Differentiated, individual activities of the company with consumer groups, taking into account the peculiarities of consumer behavior and marketing activities to retain consumers in the market provide significant support in extending the life of the product and stabilizing the company's position in the market. However, the situation when the product is in the stage of maturity requires the company to constantly search for new ways to improve the quality of the product, improve marketing activities and intensification of communications with consumers. As the main strategies at the stage of maturity, it is advisable to use various combinations marketing strategies market, product and marketing mix modifications. It can be effective to work on finding ways to use the product more diversely and new areas of its application.

It is possible to transfer obsolete goods to another, for example, smaller, firm in order to receive part of the profits and at the same time develop new product. And yet, it must be borne in mind that, despite the best efforts of the company, the profitability from the sale of obsolete goods falls, a deep recession sets in, and the goods are eventually removed from production. In such a situation, neither increased advertising nor increased costs for the marketing service will help.

To prevent the stage of decline in the life cycle of a product, it is advisable to increase the duration of the stages of growth and maturity by introducing a new product to the market in advance until the market is saturated with the old product. However, this maneuver is not available to every manufacturer, since the elimination of the gap between the cycles requires an active innovation and marketing policy, the availability of appropriate finances and the intellectual potential of employees.

Marketing Rozova Natalya Konstantinovna

Question 42 The concept of product life cycle (LCC)

Answer

The concept of the life cycle of a product was proposed by T. Levitt in 1965. The concept of the life cycle describes the behavior of a product from the moment it first appears on the market until it is completely discontinued on this market.

The concept of LC is applied to:

Type of goods (for example, a personal computer);

Type of product (for example, laptop);

Brands (for example, a laptop company Acer).

Graphically, the life cycle can be represented by a curve expressing the dependence of the volume of sales of goods on time (Fig. 50). The LCT contains several stages, in the classical case - four:

Implementation (entering the market);

Maturity;

Rice. fifty. Classic VC curve

Go-to-Market Marketing Tasks:

Formation of an adequate sales network;

Active informing potential consumers about the merits of the new product;

Development of options for the possible behavior of competitors in response to the emergence of a new product on the market;

Ensuring the adaptation of a new product on the market, etc.

Growth Stage Marketing Challenges:

Setting the optimally high price;

Creation of a wide distribution network for the mass sale of goods, etc.

Marketing tasks at the stage of maturity:

Consumer retention;

Protection of market share by differentiating goods and prices;

Finding ways to prolong the life cycle.

The main characteristics of the classic ZhCT are given in table. 31.

Table 31Characteristics of the LC

Many scientists are of the opinion that it is necessary to include and product development stage which is latent from the point of view of the market. At this stage, the needs are studied and the characteristics of the market are assessed.

The duration of the stages of the cycle and their ratio are not the same for various goods: Stages can last several days, weeks, years and even centuries. The forms of the life cycle curve also differ, which are determined not only by the nature of the product, but also by the dynamics of the market. Examples of LCT curves are shown in fig. 51–55.

Rice. 51."Fashion"

Rice. 52."Long lasting passion"

Rice. 53."Market failure"

Rice. 54."Seasonality"

Rice. 55."Comb Curve"

The concept of the ZhTsT serves to increase the efficiency of the enterprise-commodity producer. To do this, it is necessary to supervise the product throughout the entire life cycle, taking into account the problems and opportunities specific to each stage.

This text is an introductory piece. From the book Marketing. Lecture course author Basovsky Leonid Efimovich

Stages of the product life cycle Having released a new product to the market, everyone hopes that happy life. Although no one expects the product to be sold forever, the firm strives to get decent profit as compensation for all the effort and risk,

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Question 22 Lifestyle concept Answer A huge influence on the behavior of individual buyers is their lifestyle - the result of the manifestation and interaction of a person's value system, his activity, attitudes and consumption patterns and lifestyle -

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Question 41 The concept of the product life cycle (LCP) Answer The product life cycle is a sequence of forms of existence of products and processes that regulate their changes. Distinctive features of the life cycle: repeatability of the main stages; certain

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The economic development of a product has a complex cyclical nature, as a result of which the problem of the nature, types, and frequency of cyclical fluctuations is important for identifying the external causes of the crisis of specific products. The main goal of managing the life cycle of a particular product is to extend the period of its existence on the market.

PRODUCT LIFE CYCLE (LC)- a process consisting of successively advancing stages of the birth of an idea, the development of a product, the foundation of its production, the growth of market sales, obsolescence, the decline and cessation of production, replacement with a new, more progressive product. Almost all goods produced by people are forced to go through such a cycle for a different time, and the concept of the LCT is based on the fact that any product, no matter how exceptional its properties, is sooner or later forced out of the market by others, more perfect or cheaper.

When we talk about the LCT, we mean the following:

1) the life of the goods is limited;

2) the sales volume of the product includes several stages, each of which is characterized by specific tasks, opportunities and problems;

3) at different stages of the life cycle, the profit that the product brings varies;

4) each stage of the life cycle requires a special approach to the strategy in the field of marketing, finance, production, sales and personnel management.

This concept implies the passage of a number of stages by the product: product development; bringing goods to market; growth; maturity; decline.

Rice. 8.2.1. Graphs of sales volumes and accumulated profits of the life cycle

At the product development stage, product samples are created that claim to become new products based on scientific research, design, construction, technological development and testing. It is generally accepted that the process of creating a new product includes the formation of a concept, the selection of progressive ideas, the development of a concept and its experimental verification, the formation of a marketing strategy for a new product, an analysis of the possibilities of production and marketing of a product, design development, mass production, testing of the first batches of goods in market conditions, commercial production.

The stage of bringing the product to the market begins from the moment the product is launched into commercial production, it goes on mass sale. At this stage, the manufacturer does not yet make a profit as a result of the fact that the company's costs continue to increase, which began with the development of the product, the costs are not yet paid off by sales income despite the increase in sales and the ability to sell a new product at a higher price in comparison with obsolete goods.

At the stage of growth, if the new product satisfies the requirements of the market, the object of its sale begins to increase, the demand for the product increases. Due to the increase in sales, production becomes profitable, the mass of profit increases. Gradually, the initial costs of the manufacturer of the goods pay off at the expense of profits.

In the maturity phase, there is a slowdown in the growth rate of sales of the product and by the end of this stage it reaches zero due to the saturation of demand and a decrease in the interest of buyers in the product with a simultaneous increase in sales revenue until it reaches a maximum and starts to decline. Most often, by this time, the manufacturer of the goods manages to fully recoup the costs with the profit received, but the additional profit becomes less and less.

Decline phase - a period of sharp decline in sales due to a decrease in demand from consumers. As a result of a decrease in sales, profits become smaller, there comes a point when the proceeds from the sale of goods do not compensate for the costs of production and marketing. Production becomes unprofitable, and the time comes for curtailment, cessation of production and sale of goods. The product life cycle ends.

The reasons for the "aging" and "dying" of the product may be the following factors:

Demand potential has been exhausted;

Changes in the structure of demand (changes in the structure of the population, changes in values, falling purchasing power);

Technical progress;

Changing economic conditions.

In this case, the main task of the marketing service is to closely monitor changes in sales and profits in order to capture the boundaries of the stages and, accordingly, make changes to the marketing program. Key Marketing Actions Managers Should Do marketing service at various stages of the product life cycle, can be illustrated in Table. 8.2.1.

Table 8.2.1 The main characteristics of the stages of the product life cycle and typical marketing activities of the enterprise

	Stages of the product life cycle
	Creation, development	Market introduction	Growth	Maturity	decline
	CHARACTERISTICS
Sales	Not available, dangerous sales possible	Weak	fast growing	slow-growing	Falling, search for new goods
Profit	Missing	Minimum or zero profit, losses	The largest	Stabilizes and begins to decline	Low or no
Consumers	Not	Lovers of the new	Expanding mass market	mass market	Conservative
Number of competitors	No or single, potential	small	Increasing	big	Overwhelming
Production	Training	Development	Large serial	Maximum	shrinking
	MARKETING ACTIONS OF THE ENTERPRISE
Main strategic efforts	Finding a niche in the market	Market expansion	Market position approval	Standing up for your share of the profits	Maintaining profits, reducing costs
Marketing costs	Aging	High	High but decreasing	Contracting	Low
R&D	Research and design	Product development	Improvement, modernization	Modernization	Search for a replacement
Distribution of goods	Not	Uneven	intensive	intensive	selective
Price setting	Trial	high	Medium	Low	Lowest
Product	Design, prototypes	Basic option	Improved	Differentiated	Selective

The concept of the life cycle can be applied to individual products ( trademarks), as well as to entire classes of goods. The duration of the life cycle of product classes is significantly higher than individual brands of goods of this class, since an obsolete brand can be replaced by a new brand of goods of the same class.

The idea of the life cycle of goods plays a fundamental role in marketing, since different stages of the life cycle correspond to different marketing strategies and techniques, as a result of which the company's product strategy is constantly changing. Therefore, the product life cycle curve does not always have the same shape. One commonly encountered variation is the "recycle" curve. The second "hump" of sales is caused by sales promotion activities carried out at the stage of product decline. Another variation is the "comb" curve), consisting of a series of successive cycles generated by the discovery of new characteristics of the product, new ways of using it, the emergence of new users.

Rice. 8.2.2. Varieties of LC curves

The concept of the life cycle can be applied to such well-known phenomena as style, fashion or fetish.

Style is the main original form of expression that arises in a particular sphere of human activity. For example, there are styles in clothing (evening, casual) and art (realistic, surreal, abstract). Once created, a style can exist for many generations, either gaining wide popularity or losing it. The style is characterized by a cycle with several periods of increased interest.

Fashion is the most popular or widespread style in a given period of time in a given field of activity. It is very difficult to predict the duration of an individual stage in the fashion cycle.

Fetishes are private manifestations of fashion that quickly gain everyone's attention, are perceived with great enthusiasm, quickly reach the peak of popularity and very quickly move into the decline stage.

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Maslova TD Vozhuk ST., Kovalik L.N. Marketing. - St. Petersburg: Peter, 2008. - S. 180.

Stukanova I.P., Nikitina L.A., Dubrovin I.L. Management and marketing. - M.: Colossus, 2007. - S. 144.

Klimin A.I. Marketing: a course of lectures. - M., 2005. - S. 45.

Kolesneva E.P. Commodity policy industry enterprises. - Minsk: Information Center of the Ministry of Finance, 2007. - P. 35.

Laptev A., Konev I.P., Silantieva L.P. Strategic and operational marketing. - Petrozavodsk: PetrGU Publishing House, 2006. - P. 77.

Maslova T.D., Bozhuk S.G., Kovalik L.N. Marketing. - St. Petersburg: Peter, 2008. - S. 163-165.

Tutorial output:

Marketing: questions and answers / ed. N.P. Ketova. - Rostov n / a: Phoenix, 2009. - 478 p. - (We pass the exam).

As you know, almost everything can act as a product: from innovative invention to food, from valuable information to art. But, whatever the product, it always goes through a certain life cycle. Just like any organism, the life of a product begins at birth. This is followed by "entry into the people" (bringing to the market), then a period of active growth and maturity, after which the saturation phase inevitably begins. And then the recession phase, which can easily end in "death" - that is, irreversible disappearance from the market. Naturally, each company - "parent" seeks to extend the active part of the life of its "brainchild", and therefore, the question arises: how to delay the approach of the saturation phase? Or, if it has already arrived, how to revive the product and return the buyer's interest in it?

The duration of the life cycle as a whole and its individual phases depends both on the product itself and on the specific market. Commodities are considered to have a longer life cycle, finished goods- shorter. In addition, the life cycle of the same product in different markets may be different. There are several ways to extend the "life of a product", the effectiveness of each of which depends on a number of factors that somehow affect a particular product.

Product modification/improvement

You don't need to "reinvent the wheel", you just need to add a new part or function to it. At the same time, the innovation must be competitive, and better - unique in the market of similar products. For example, recently, National Semiconductor, counting on the resurgence of interest in Internet set-top boxes, released a concept product that combines the functions of eight devices at once in one portable set-top box "weighing less than a pound." Origami - this is the name of the novelty - can be turned into a video camera, videophone, Web-tablet, terminal Email And so on.

New design

A change in design is not just a superficial change in a product, as it might seem at first glance. When the consumer is fed up with high technical performance (and in most cases the leading companies keep up with each other in the speed of introducing new technologies), before making a choice, he begins to pay closer attention to appearance goods. Let's remember the lineup Nokia mobile phones. Naturally, they differ in technical and functional characteristics, however, today Nokia attaches great importance to design. Advertising of the latest series of mobile phones largely exploits the attractive appearance of mini phones. It is the design, and not the capabilities of the phone itself, analogs of which can be found in other brands, that distinguish Nokia from other manufacturers.

New packaging

The new packaging with the same content is a great opportunity to remember the quality and, at the same time, keep up with the progress. The well-known Mentos dragees in the classic package are a cylindrical pack and a rounded candy, Mentos in the new package is a blue cube-shaped dragee (which was not previously available in any Mentos variety), and the pack itself is made in the form of a box with a "long-playing "cover. The same with the new wide pack of Orbit chewing gum. Coming up with a completely new type of chewing gum is perhaps impossible, while changing a pack is a simple matter.

Support for large-scale action

It may well return the lost interest in the brand and sponsorship of any interesting mass action. For example, in 1990 and 1991, the Swiss pharmaceutical concern Bayer sponsored the Kremlin Cup, a tennis championship. The Coca-Cola Company was the general sponsor of the fourth Assembly "Restaurant World Expo-2001" (this, of course, is not the only sponsorship project of Coca-Cola Refreshments), and the general sponsor of the X-Games competitions in the Volen park was Klinskoye Pivo.

Organization of your own event

Organizing your own event is a great way to remind yourself and your abilities. An example of this is the show of world gymnastics stars "Galina Blanca-2001" or, for example, the show race in Krylatskoye with the participation of the strongest skiers of the planet "Miracle Yogurt - Ski Sprint" "2000. It is impossible not to mention that for many years now Nescafe holds the Extreme Sports Festival "Nescafe - Pure Energy".

extreme situations

Oddly enough, extreme situations can also be useful for extending the life of a particular product / service. These situations include shortages, economic crises, food shortages, environmental problems... For example, during the next economic downturn in our country, the network mobile communications"SONET" has released its famous "Anti-Crisis" tariff (unlimited for $25 per month), thereby significantly increasing the number of subscribers.

New service

A new service can be a significant support for an existing service package. Suppose a company that restaurant business, introduces the so-called happy hour. It is usually done 1-2 times a week. A visitor within a certain time (2-3 hours) can take two mugs of beer for one price, or the restaurant will offer drinks corresponding to the meal for free for certain dishes. This new service will definitely attract more visitors.

Another example is a new version of the service. Mobile subscribers are given the opportunity to order food in 6 thousand restaurants of the Food.com Internet network at home. Users of the created Motorola-Food.com system can, of course, place an order with mobile phone Motorola with your preferences, shipping address, and payment method.

Also an option to remind yourself. Any, even the most successful slogans and commercials over time, they "get bored" and begin to cause irritation, so they need to be changed even by those companies whose products have not yet entered the recession phase.

A striking example is the evolution of Snickers slogans. Popular chocolate has long been associated with the slogan "Eat - and order!", Then it changed to the option "Don't slow down - snickers!" and the latest find of advertisers "Stop the nut madness!". Accordingly, when the slogan changes, both the television and radio commercials change, and with them, the outdoor advertising and everything else.

This is an extended version of the previous paragraph, when not just the slogan or video is changed, but the entire advertising campaign generally transferred to another advertising agency or restart.

Release of a new product under the same brand

It's really good way more carefully approach the issue of consumer tastes and expand the range of their products. Recall the giant company Wrigley's, a leading manufacturer of chewing gum. Initially, the company had only three varieties of its products - this is the well-known classic trio of "arrows". Today, Wrigley's product range consists of about ten options for Orbit chewing gum, each with its own original taste. In order to develop a new target audience, Wrigley's, gradually introducing various varieties of chewing gum to the market one after another, also produces children's Orbit. And this Wrigley's, apparently, seemed not enough, and soon chewing gum "medicinal properties" appeared on the shelves - Airwaves. At the same time, the classics of the genre - doublemint, spearmint and jucy fruit, still remain "on horseback".

Price policy regulation

Regulation of pricing policy can be carried out both in the direction of price reduction and in the direction of increase. Accordingly, by setting certain prices, the company "masters new frontiers", expanding its target audience. A chain of fast food restaurants - McDonald's - regularly change their pricing policy: either by releasing new varieties of sandwiches at a price acceptable to all segments of the population, or by reducing prices for existing products.

Numerous McDonalds promotions are also indicative. For example, the sale of two sandwiches for the price of one, the reduction in the price of the sandwich leader in sales - Big Mac, as well as the introduction of numerous new products, such as: village potatoes (as an alternative to french fries), "Italian Weeks" - two new a sandwich with Italian cheese "Mozzarella", "Taste of the Season" - cocktails or pies sold in McDonalds exclusively during this season and other marketing solutions.