BUS 100 Assignment 3 Product Life Cycle

The Product Life Cycle

Herzing University

What is the product life cycle? Every product has a life cycle. The stages through which a product is developed, brought to market and eventually removed from the market is known as the “Product Life Cycle.” There are four stages to the product life cycle.

The first of the four product life cycle stages is the Introduction Stage (productlifecyclestages.com/product-life-cycle-stages/introduction/.) At the Introduction (or development) Stage market size and growth will be modest. This initial stage could require a considerable investment (productlifecyclestages.com/product-life-cycle-stages/introduction/.) Keep in mind that spending a significant amount of money during this stage does not guarantee the success of your product. At the Introduction Stage, an effective marketing plan will need to be developed. There will be challenges during the Introduction Stage. When a business launches a new product, usually there is little to no market for it (productlifecyclestages.com/product-life-cycle-stages/introduction/.) Quite naturally, it is apparent that sales are going to be minimal in the beginning. There will be times when a fantastic marketing campaign will cause your product to take off right away, but these are typically unique cases. New products may require some research and development, once they are created. Many manufacturers will need to spend a significant amount of money in marketing and promotion in order to accomplish the kind of need that will make the new product a success. Getting a product to market will cost a lot, therefore it is highly doubtful that your company will see any profits at the Introduction Stage.

Products at the Introduction Stage must be attentively monitored to make certain that they start to grow, which leads us to the second of the four product life cycle stages. The Growth Stage is where your product’s sales start to surge intensely and when the product experiences high demand (study.com/academy/lesson/growth-stage-of-the-product-life-cycle.) During the Growth Stage, a company will typically see a visible surge in competition. Normally, this causes other companies to create comparable products.

After the Growth Stage, the Maturity Stage is the third stage of the product life cycle stages. During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market (Boundless Marketing Boundless, 20 Sep. 2016.) In the product life cycle, the Maturity Stage lasts the longest. The following occurs during the Maturity Stage:

The fourth and final stage of the product life cycle stage is the Decline Stage. Sales and profits begin to drop during the Decline Stage and the number of competitors is diminished even further (referenceforbusiness.com/management/Or-Pr/Product-Life-Cycle-and-Industry-Life-Cycle.) Products’ prices are also kept as low as possible during the Decline Stage. Although, products can still make money in the Decline Stage, the demand for the product is none to nominal (quora.com/What-are-examples-of-products-in-their-decline-stage.) Seemingly, there are still enough sales to keep the product around.

  1. Costs are lowered as a result of production volumes increasing and experience curve effects
  2. Sales volume peaks and market saturation is reached
  3. Increase in numbers of competitors entering the market
  4. Prices tend to drop due to the proliferation of competing products
  5. Brand differentiation and feature diversifications is emphasized to maintain or increase market share
  6. Industrial profits go down (Boundless Marketing Boundless, 20 Sep. 2016.)

The DVD is currently in the Maturity Stage (the third stage) of the product life cycle. A problem that exists during the Maturity Stage is the advancement of technology (marketing91.com/product-life-cycle.) Technology has produced the problem of duplication. The DVD is still available in duplicate markets, but at the same time so are several competing products. The competing products (Netflix, Sling, VuDu, Hulu, etc.) are somewhat different in an environmentally friendly manner of speaking. With the rising demand of internet downloads and digital video recorders, the DVD trend could see the once dominant product go the way of the tape deck, vinyl LP and VHS player (forbes.com/sites/scottmendelson/2013/11/06/why-i-mourn-blockbuster-video.) With retail video stores closing at an increasingly rapid rate (Blockbuster, Hollywood Video, Movie Gallery, etc.) the DVD rental and ownership market is being dominated by online streaming.

Once Netflix calls it quits for the DVD rental program and when Redbox goes full-streaming, there will not be a place for most people to rent let alone buy a physical DVD or Blu Ray of a given film outside the publicly funded library (forbes.com/sites/scottmendelson/2013/11/06/why-i-mourn-blockbuster-video.) One might say that as long as streaming is available that you are merely replacing one product for another. Some from the older generation (the DVD generation) has not evolved into the technology savvy world that we live in now. This “new normal” has denied consumers an alternative. When there is no place to physically buy or rent a DVD, you are either stuck at the mercy of online streaming or you have to purchase a title for far more than a fair rental price (forbes.com/sites/scottmendelson/2013/11/06/why-i-mourn-blockbuster-video.) With that being said, in five years time, sadly enough the DVD may have reached the fourth and final stage of the product life cycle, the Decline Stage.

References:

Productlifecyclestages.com/product-life-cycle-stages/introduction

Study.com/academy/lesson/growth-stage-of-the-product-life-cycle

Boundless. “Maturity.” Boundless Marketing Boundless, 20 Sep. 2016. Retrieved 16 April 2017

Referenceforbusiness.com/management/or/pr/product-life-cycle-and-industry-life-cycle.html

Quora.com/what-are-examples-of-products-in-their-decline-stage

Marketing91.com/product-life-cycle

Forbes.com/sites/scottmendelson/2013/11/06/why-i-mourn-blockbuster-video

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