Product Life Cycle impact Competitive Strategy

 

The product life cycle is a process that a product goes through into the time it initially appears on the market to the time it is refused or eliminated. The product life cycle is divided into four segments. Introduction, growth, maturity, and decline. 

The first stage is once a product has been produced then that is introduction. At this point, the product has been introduced to the market. In this stage, marketing and promotion are quite important. Due to the high cost of product launch, profits are non-existent. The corporation can obtain a feel of how consumers react to the product at this point. The corporation might adopt two techniques during the introductory stage: skimming and penetration. In a skimming approach, the corporation can charge a premium price while stating that the product has technological superiority, greater properties, and quality, as well as a large advertising budget to establish rapid and widespread market awareness. You have to encourage a huge number of people to test out your product. the corporation intends to try this skimming approach with a high pricing and big advertising in order to maximize earnings. Before a rival copied or imitated the product and entered the market. The second penetration technique is for certain businesses to increase their market share. They think that, in the long run, a bigger volume of sales will result in reduced unit costs and more profits. They decide on the lowest price based on the assumption that the market is sensitive to prices. 

Growth is the second stage. Consumers are already using and purchasing the product at this point. As a result, sales are growing. Other businesses learn about the product and begin to promote their product. Sales are normally rising and producing income at this point. This stage of marketing sought to increase the product's market share. These three tactics can be used by a corporation in its early stages of development. First and foremost, raise the level of output. The second step is to increase the quality. To increase its product quality standards, the company will take initiatives to upgrade its product quality standards. Quality will contribute in increasing sales of the company's goods. Intel chips, for example, are always working to help increase their quality. The third option has a lesser price. Companies may cut their prices based on the scenario in order to increase their market share and position. In order to attract more consumers during the off-season, several airlines cut their base fare. 

Maturity is in the third stage. Since the product has gained acceptability from the majority of possible purchasers, sales growth has slowed at this point. Due to rising competition, profits have remained or decreased. The following three tactics can be used by a mature organization. The first is product customization. When sales are flat, the first thing a corporation may do is change the product's attributes in order to make it more appealing and to keep it on the market. The company will seek out new markets or segments which are unfamiliar with the product or have yet to test it. The third step is to change the marketing mix. The company may look at making certain changes to its marketing mix, such as price and promotion. The simplest strategy to attract the lower-income group or segment with lesser income is to cut the price or offer a larger discount. 

The fourth stage would be the decline stage. In the decline stage, product sales fall and customer behavior shift as demand for the product declines. The company's product is losing market share, and revenues are declining as a result of increased competition. We can employ one of the three tactics listed below during the decline period. Harvesting method is number one. In order to maximize profit, the company eliminates all useless marketing costs. However, this technique is followed until the corporation can no longer keep up sales and the product are eventually phased off of the market. An often-known example of a harvest approach is the telecommunications land line company. It was no longer essential to have a landline phone due to the availability of a wireless signal. Concentrated strategy is number two. Even when the business is in decline, the company focuses on a few key areas where its marketing activities are more successful than other segments. Strategic alliances are ranked as the third. The company may decide out an alliance with other organizations that are interested in working together or improving product features, and the product's market value helps to maintain the product and increase profit for a period of time. Each firm may target opportunities from the other's current client base due to the strategic alliance.