synonymProduct life cycle(Market life of products) generally refers to the product life cycle
Product life cycle is also called "commodity life cycle".It refers to the whole movement process of products from the time they are ready to enter the market to the time they are eliminated from the marketproduction cycle Determined.It is the product or commodity in the market movementEconomic life, that is, in the marketCirculation processIn, the cycle of goods from prosperity to decline caused by changes in consumer demand and other factors affecting the market.Mainly by consumersConsumption mode、Consumption level、consumption structureAnd consumer psychology.It is generally divided into four stages: introduction (entry) stage, growth stage, maturity stage (saturation stage), and decline (decline) stage.[1]
1、MarketingThe defined product life cycle is: import, growth, maturity and decline.This can no longer summarize the whole process of the product life cycle.Just as the life cycle of human beings is never a process from birth to death.Therefore, the four stages are defined as:Product market life cycle。
2. With the rise of PLM software, the product life cycle begins to include requirements collection, concept determinationproduct design, product launch and product market life cycle management.Just like the life cycle of human beings, it also defines the process of parents' preparation, pregnancy and childbirth to the life cycle of human beings.
3. Many excellent modern enterprises feel that the above two life cycles cannot completely summarize the product life cycle.On a product based basisManagement conceptThe product life cycle can be summarized as:Product strategy、Product market, product demandProduct planning, product development, product launch, and product delisting life cycle management.[2]
principle
Announce
edit
（1） Product life cycle stage
The typical product life cycle can be generally divided into four stages, namely, entry stage, growth stage, saturation stage andRecession period
1. Entry period.When new products are put into the market, they enter the input period.At this time, customers do not know about the product, only a few customers who are seeking novelty may buy it, and the sales volume is very low.In order to expand the market, it needs a lot of promotion expenses to promote the products.At this stage, due to technical reasons, the product cannotMass productionAs a result, the cost is high and the sales increase is slow, so the enterprise may lose money rather than gain profits.The product also needs to be further improved.
2. Growth period.At this time, customers are already familiar with the product, a large number of new customers begin to buy, and the market gradually expands.Mass production of products,production costsRelatively lower, the sales volume of the enterprise rose rapidly, and the profit also grew rapidly.competitorSeeing that it is profitable, they will enter the market one after another to participate in competition, so thatSimilar productsSupplyAs the price increases, the price decreases,Enterprise profitGrowth rateGradually slow down and finally reachlife cycleThe highest point of profit.
3. Saturation period.market demandIt tends to be saturated. There are few potential customers. The sales increase slowly until it turns down, which indicates that the product has entered a mature period.At this stage, competition gradually intensifies, product prices decrease, promotion costs increase, and corporate profits decline.
4. Recession.With the development of science and technology, new products or newsubstituteAppear, will make the customer'sConsumption habitsThe sales and profit of the original products have declined rapidly due to the change of products to other products.As a result, the product entered a recession.
（2） Product category, form and brand life cycle
Product category refers to all products with the same function and purpose.Product formIt refers to the products of the same type,Accessibility, uses or entities selling different products.andProduct brandIt refers to the specific products produced and sold by the enterprise.asBaishabrandFilter tipCigarette refers to the product category;Filter cigarette is a type of cigarette, namely product form;Baisha filter cigarettes refer to a specific product and a product brand among filter cigarettes.The life cycle of product category is longer than that of product form and product brand, and the maturity period in the life cycle of some product categories may continue indefinitely.The product form generally shows the above typical life cycle process, that is, from the introduction period, through the growth period, the maturity period, and finally to the decline period.As for the life cycle of brand products, it is generally irregularmarket environmentAnd enterprisesMarketing decisions、Brand awarenessAnd so on.High brand awareness has a long life cycle, and vice versa.For example, international well-known brands“Coca Cola”It has been so popular for a hundred years.
Cycle description
Concept of product life cyclePLCThe sales history of a product is compared to the life cycle of a person, which goes through the stages of birth, growth, maturity, aging, and death.As far as products are concerned, they will go through a stage of development, introduction, growth, maturity and decline.
fromDevelop productsThe period from the assumption to the success of product manufacturing.The sales volume of this product during this period is zero,Corporate investmentIncreasing.
(2) Introduction period
New products are newly launched, and sales are slow.Because the cost of introducing products is too high, the initial profits are usually low or negative, but at this time there are few or no competitors.
(3) Growth period
After a period of time, the product has gained considerable popularity, with rapid growth in sales and significant increase in profits.However, due to the rapid growth of the market and profits, it is easy to attract more competitors.
(4) Maturity
At this time, the market growth trend slows down or saturates, and the products have beenpurchaserAccepted, the profit gradually declined after reaching the peak.heremarket competition Intense, the companyProduct positionLarge amount of investmentMarketing expenses。
(5) Recession period
During this period, the sales volume of products declined significantly, and the profit also declined significantly.Survival of the fittest,market players More and more.
Periodic curve
Characteristics of life cycle curve:product development During this period, the sales volume of the product was zero, and the company's investment continued to increase;In the introduction period, the sales are slow, and the initial profits are usually low or negative;In the growth period, sales grew rapidly and profits also increased significantly;In the mature period, profits gradually decline after reaching the peak;During the recession, the sales volume of products declined significantly, and the profit also declined significantly.
Scope of application: This curve is applicable to thelife cycleDescription of;Not applicable to style, fashion, fashion andScallop in ShellDescription of the life cycle of the type I product.
marketing strategy
Announce
edit
The four stages of the typical product life cycle show different market characteristicsmarketing strategyIt is formulated and implemented based on the characteristics of each stage.
Marketing strategy in the introduction period
The introduction period is characterized by low product sales and high promotion costs,Manufacturing costHigh,Sales profitVery low or evennegative。According to the characteristics of this stage, enterprises should strive to achieve: the products put into the market should be targeted;The time to enter the market should be appropriate;Try toSales forceDirect investment to the most likely buyers to enable the market to accept the product as soon as possible, so as to shorten the introduction period and enter the growth period faster.
stayproductThe introduction period ofMarketing strategy。The following four strategies are available only when considering the price and promotion expenses:
1. Fast skimming strategy.
That is, launch new products at high prices and high promotion costs.The implementation of the high price strategy can maximize the profit in each unit of sales and recover the investment as soon as possible;High promotion costs can quickly establish popularity and occupy the market.The implementation of this strategy must meet the following conditions: the product has a large demand potential;Target customersNovelty seeking mentalityStrong, eager to buy new products;Enterprises facepotential competitors The threat ofbrand image。Generally speaking, in the product introduction stage, as long as the new product has obvious advantages over the substitute product, the market will not care about its price.
2. Slow skimming strategy.
The purpose of launching new products with high prices and low promotion costs is to obtain more profits with the lowest possible costs.The conditions for implementing this strategy are:market size Smaller;The product has a certain popularity;Target customers are willing to pay high prices;The threat of potential competition is small.
Launch new products at low prices and high promotion costs.The purpose is to preempt, enter the market at the fastest speed, and achieve the largest possibleMarket share。Then with the expansion of sales and outputUnit costReduceEconomies of scale。The conditions for implementing this strategy are: the productMarket capacityQuite large;Potential consumersNot familiar with the product and very sensitive to the price;Potential competition is relatively fierce;Product unitManufacturing costIt can be rapidly reduced with the expansion of production scale and sales volume.
Launch new products at low prices and promotion costs.Low price can expand sales, and low promotion cost can reducemarketing cost, increase profits.The applicable conditions of this strategy are:Market capacityVery large;The product is well known in the market;The market is very sensitive to price;There are some potential competitors, but the threat is small.
Marketing strategy in the growth period
After the market introduction period of the new product, consumers are already familiar with the product,Consumption habitsIt has also been formed, and the sales volume has increased rapidly, so this new product has entered a growth period.After entering the growth period, regular customersRepeat purchase, and brought new customers. The sales volume increased sharply, and the profits of the enterprise increased rapidly. At this stage, the profits reached the peak.With the increase of sales volume, the production scale of the enterprise has gradually expanded,Product costGradually reduce, and new competitors will enter the competition.As competition intensifies, newProduct characteristicsIt began to appear, and the product market began to subdivide,distribution channel Increase.In order to maintain the continuous growth of the market, enterprises need to maintain or slightly increase the promotion expenses. However, due to the increase in sales, the average promotion expenses have declined.In view of the characteristics of the growth period, the enterpriseMarket growth rateTo extend the time to maximize profits, the following strategies can be adopted:
1. ImprovementProduct quality。Such as adding new functions, changing product styles, developing new models, and developing new uses.Improving the product can improve thecompetitive powerTo meet a wider range of customer needs and attract more customers.
adoptMarket segmentationFind new unmet market segments, organize production according to their needs, and quickly enter this new market.
3. Change the focus of advertising.
Shift the focus of advertising from product introduction to establishmentproduct linesCome up, set up product brand, maintain old customers and attract new customers.
4. Timely reduce the price.
At an appropriate time, price reduction strategies can be adopted to stimulate consumers who are more sensitive to pricesBuying motivationAnd take purchase action.
Mature marketing strategy
After entering the mature period, the sales volume of the product grows slowly, reaching the peak gradually, and then drops slowly;The sales profit of products also declined from the highest point in the growth period;The market competition is very fierce, and similar products of various brands and styles continue to appear.
For mature products, it is advisable to take the initiative to extend the maturity period or recycle the product life cycle.To this end, the following three strategies can be adopted:
1. Market adjustment.This strategy is not to adjust the product itself, but to find new uses of the product, seek new users or change marketing methods, so as to expand the sales volume of the product.
twoProduct adjustment。This strategy is to meet the different needs of customers and attract customers with different needs through the adjustment of the product itself.Overall product conceptAny level of adjustment can be regarded as product re launch.
threeMarketing mixAdjustment.That is, through product, pricing, channel and promotionMarketing mix factorsMake comprehensive adjustments to stimulate the recovery of sales.Common methods include reducing price, improving promotion level, expanding distribution channels and improvingService qualityEtc.
Marketing strategy in recession
The main characteristics of the recession period are: sharp decline in product sales;The profit obtained by the enterprise from this product is very low or even zero;A large number of competitors withdraw from the market;Consumer'sConsumption habitsHas changed, etc.In the face of products in recession, enterprises need to conduct serious research and analysis to decide what strategies to take and when to exit the market.The following strategies are usually available:
1. Continue strategy.Continue to use the previous strategy, and use the same distribution channels, pricing and promotion methods according to the original market segments until the product completely exits the market.
twoCentralized strategy。holdEnterprise capabilityAnd resources are concentrated on the most favorable market segments and distribution channels, from which profits can be obtained.This is conducive to shortening the time for products to exit the market, while creating more profits for enterprises.
threeShrinking strategy。Abandon hopelessCustomer group, greatly reduce the promotion level, and try to reduce the promotion expenses to increase profits.This may accelerate the decline of the product in the market, but it can also make profits from customers who are loyal to this product.
4. Abandon the strategy.For products that decline rapidly, we should make a quick decision and give up business.It can take the form of complete abandonment, such as completely transferring products or immediately stopping production;It can also adopt the method of gradually giving up, so that the resources it occupies can be gradually transferred to other products.
Product life cycle theoryThe background product life cycle theory is the U.SHarvard UniversityProfessor Feinong in 1966, in his book "Theinternational investment Andinternational trade》First proposed in this paper.Feinong believes that product life refers to the marketing life in the market. Like human life, products need to go through the cycle of formation, growth, maturity and decline. The time and process of this cycle are different in countries with different technology levels, and there is a large gap and time difference between them. It is this time difference, which is reflected in the technological gap between different countries,It reflects thecompetitive position The difference between them determines the change of international trade and international investment. In order to make it easier to distinguish, Feinong divides these countries into innovation countries (generally the mostdeveloped country）General developed countriesdeveloping country。
Feinong also divided the product life cycle into three stages, namely the new product stage, the mature product stage andStandardized productsPhase.Feinong believes that in the stage of new products, innovative countries use their monopolyTechnical advantages, develop new products, because the products are not fully formed, the technology is not perfect, in addition, there are few competitors, and the market competition is not fierce,Alternative productsLess, productadded valueHigh,domestic marketThey can meet their requirements for high profits. The products are rarely exported to other countries, and the vast majority of products are sold domestically.At the stage of mature products, due to the breaking of the technological monopoly and market oligopoly of the innovative countries, the number of competitors increases, the market competition is fierce, the number of alternative products increases, the added value of products continues to decline, enterprises pay more attention to the decline of product costs, the lower costs begin to be in a more favorable position, and the markets of the innovative countries and general developed countries begin to saturatecost reduction, improveeconomic performanceTo curb domestic and foreign competitors, enterprises have invested in developing countries and gradually abandoned domestic production.In the stage of standardized productsProduction technologyThe production scale and the product itself have been fully mature. At this time, the requirements for the skills of the producers are not high. The monopoly technological advantages of the original new product enterprises have disappeared. Cost and price factors have become decisive factors. At this time, developing countries have obvious cost factor advantages. Innovative countries and general developed countries want to further reduce production costs,We began to invest and build factories in developing countries in large quantities, and then sell our products to other countries and third country markets.
According to the introduction,Product life cycle theoryAs one of the branches of international trade theorydirect investmentTheory exists, which reflectsInternational enterprisesThe process of direct investment from the most developed countries to the general developed countries and then to the developing countries.
Product life cycle (PLC) provides a set of applicable marketing planning viewpoints.It willProduct sharingIn different strategic periods,Marketing personnelDifferentMarketing mixPolicy.In addition, the product life cycle only considers the two variables of sales and time, which is easy to understand.
shortcoming
Its disadvantages are:
a、Start and end of each stage of the product life cyclePoint divisionThe standard is not easy to confirm.
b、Not allProduct life cycle curveThey are all standard S-shaped, and there are many special product life cycle curves.
c、Unable to determine whether the product life cycle curve is suitable for a singleProduct ItemsLevel is also a product collection level.
d、This curve only considers the relationship between sales and time, and does not involve other variables affecting sales such as cost and price.
e、Easy to cause“marketing myopia ”, thinking that the product has reached the recession period and will still exist before it is too earlymarket valueOfGood productsThe product line is eliminated.
f、Product decline does not mean that it cannot be regenerated.If appropriate improvement strategies are adopted, the company may create a new product life cycle.
Special products
Announce
edit
Special product life cycle includes style product life cycle, fashion product life cycle, hot product life cycle and scallop product life cycleProduct life cycle curveNot the usual S-type.
style
（style）
It is a basic but prominent way of expression in human life.Once the style comes into being, it may last for several generations. According to people's interest in it, it presents a recycling mode, sometimes popular, sometimes not popular.
Stylistic product life cycle
fashion
It refers to the style accepted and welcomed by everyone in a certain field.The life cycle of fashionable products is characterized by that few people accept it when it is first launched (called the unique stage), but the number of people who accept it slowly increases over time (the imitation stage), and finally it is widely accepted (the stage of mass popularity), and finally it slowly declines (the recession stage). Consumers begin to turn their attention to another fashion that is more attractive to them.
It is a kind of fashion that is aggressive and quickly attracts public attention, commonly known as fashion.The life cycle of hot products tends to grow rapidly and decline rapidly, mainly because it only meets the curiosity or needs of human beings for a while, and it attracts only a few people who seek stimulation and novelty, and usually cannot meet stronger needs.
Hot product life cycle
Scallop in Shell
（scallop）
The scallop type product life cycle mainly refers to the continuous extension and re extension of the product life cycle, which is often becauseProduct innovationOr discover new uses from time to time.
