“Everyone and welcome to mrs. Simplifies tutorials in this video. We re going to look look at the product lifecycle model. So what is the product lifecycle model.
We briefly and just touched upon the product lifecycle model in our previous video. So i thought it s important that i shed some more light on the product lifecycle. It is basically a model used for devising marketing and sales strategies. Essentially.
It is a plot of the lifetime of a product in terms of its sales against the passage of time that is a very simple way of describing the model. So what what is it used for what is the tool or the model used for it is basically used to predict the stages a product or a brand goes through during its entire lifetime. So from right from the stages. Where a product is developed and then launched to the stages.
Where you know you have a steady growth in sales to the stages. Where there is a rapid growth and then finally to the stages where the growth starts. Slowing down and ultimately the growth ceases to exist so this is plotted against against time. And that is essentially what the product life cycle model is so it s basically also a tool used for forecasting sales trends and it therefore helps businesses understand where to focus their their investments their revenues.
Because the business could have a wide portfolio of products. And plotting a product lifecycle would help it understand the business. Understand if a product is going through a growth stage or a maturity stage and therefore align. Its investment strategies accordingly and once the product approaches a decline stage which obviously we will understand the stages during the course of this video.
But the client state is the final stage and once products approach these decline stage companies would need to then firstly understand if there is life left in the problem. The product itself and then develop strategies to possibly extend its life and send it through to another maturity stage or another growth stage okay so let s look at the the product lifecycle model and discuss these stages now as you can see here in this chart. It s essentially a plot of the sales of a product or a brand or a portfolio of products and brands against time. So this is like a typical representation of product lifecycle model.
Please note that the product extension part of it which is circled here for your reference is not compulsory. A part of each product lifecycle. I ve added it for a specific reason. And that reason is that a lot of products can go through with some good strategies can go through a product extension period through which you know sales can take off once again and the product can come back to life.
We ll discuss all of that during the course of this video of course. So essentially the very first stage after the development of a product is the introduction phase. Where the growth of the product. The growth of sales of the product is slow its steady and then we approach a stage.
Where obviously if the product is successful. We expect the growth to increase the rate of growth to rapidly increase. And this is what is called the growth stage and then there comes a time where the grew the rate of growth steadies off so the rate of rate of growth kind of mix ors. And that is called the maturity stage.
And it s normally at this maturity stage that the trend is reversed and then ultimately we go through a phase. Which is called the decline phase. And it s in this decline phase that the rate of growth of sales slowly reduces and ultimately the product ceases to exist. Because of it.
But as of already mentioned a lot of products can go through the product extension stage. Which we will be discussing the course of this video. So now that we know that there are several stages introduction growth maturity and decline. What strategies would companies adopt to to execute these stages perfectly.
So basically for the introduction stage. Companies need to adapt a penetrative pricing strategy. Competitive pricing and more than competitive. It s a penetrative strategies to make sure that the product penetrates.
The product penetrates. The target audiences and then early adopters are identified. So that the product or the concept can be introduced to and then heavy focus on marketing to ensure that there is product awareness and brand awareness. So these are things that companies do to actually introduce the products of the market and therefore all of this belongs to the introduction stage and then we move on to the strategies for the growth stage at this stage.
It s been identified that the product has great potential to be successful to be a market leader. So therefore we look at widening the customer base and target new markets. We maximise the distribution. We maximize production and always ensure that there s good stock there s good availability and the demand for the product is met that s why we have a growth that s why we have a growth in certain in sales because we are able to match the demand and then we also don t stop at the head.
You know in terms of improving the product. We invest in continual product development and then we improve the product by adding new features and therefore we have new mobile phone models coming up every year. They ve got subtle new features. Which are introduced in order to develop the product further we get on to some examples later obviously.
But next in line are the strategies for the maturity stage. So when we understand that a product or a brand or a folio products or brands are going through a maturity stage. We start examining extension strategies so these are strategies wherein. We try and identify new markets new customer bases new usps.
We make changes to products we bring new usps. We introduce new usps and bring them to the limelight. We try our level best to ensure that the product doesn t go into a decline state and then we also balance out our production. If we understand that extension strategies aren t going to work on our in in in our you know for our brand for our portfolio of brands or whatever be the case.
If we understand that extension strategies are not going to revive the product or the concept. We have to balance out the production otherwise. There will be a surplus and there is a high chance of loss so what about the last days. The the decline stage.
What strategies do you adapt there we basically try and ensure that we still maximize profits and this can be done by limiting the marketing expenditure and then we obviously also have to get rid of all of our stock. And also try and milk the market as much as possible so we adapt we adopt very competitive pricing strategies to make sure that we are still edging ahead of the competition. We also provide support and brand value to our existing customers to make sure they keep coming back to us and they stick to us. But if a product has approached a decline stage.
Then you know there is a very high chance that the decline stage is going to continue because a lot of the times products go through decline stages. Because of changes in technology changes in customer behaviors. And a lot of other factors. Which cannot be controlled.
Now let s look at some examples now this is very interesting i want you to focus on this section. Because we be speaking about products and a portfolio of products what in terms of examples. What i ve actually done is instead of just using the tried and tested examples that everybody else uses like the apple iphone or the apple ipod. I ve taken examples from the technology sector.
The mobile phone sector companies and i ve looked at the whole company portfolio overall so in this example. We re going to look at the company nokia in itself and the sales figures for that basically as a projection. So we look at the year 1995 to 2002. Where there seemed to have been an introduction phase.
Because the world was mobile phones were new at that time and the sturdiness of the mobile phones developed by nokia seemed to really attract start attracting attention and then we had that amazing enormous growth rate between the years 2002 and 9. Approximately. And then a maturity stage in the next couple of years and then after that we saw the brand declining at a steady state. And it has been declining until date.
I ll say so it s safe to say that it actually underwent a decline. Which is continuing till date. But as of 2017 may 2017 when this video was recorded there is certain news that nokia is investing heavily into coming back into the market. And is making the right partnerships and developing new ideas developing new concepts.
And trying to make a huge comeback of sorts into the market. So will we have an extension phase. Only time will tell okay so we move on to our next example. Which is samsung mobile s again.
It s got it had an introduction phase and then it had a growth stage and then we don t actually know i mean. This is kind of speculative. But it there is a high possibility that we are at a sort of a maturity stage. Where where the growth of sales would would possibly would possibly stabilize for a good amount of time because the market is very competitive at the moment.
The mobile phone market and yes sorry i forgot to mention that we re in terms of samsung. We re specifically looking at samsung mobile s because as you understand samsung is a is a enormous organisation that goes on from developing military technologies to television sets music systems and will you know a whole portfolio of products so we are looking at samsung mobile s in particular so after the growth stage that samsung is experienced we can say that it is currently going through a sort of a mixture of growth and maturity. But even if it s considered to be at a maturity stage. It is very difficult to predict how long this maturity phase is going to go on because essentially that is that is one of the flaws.
That is one of the criticisms or one of the question marks on the reliability of the whole model itself which we are coming to reliability so as just seen in the in the chart for samsung samsung mobile s we know we can t predict we cannot actually determine if a lot of brands portfolio brands concepts companies etc are actually going to stay in the maturity stage. All the growth stage for a number of years or a number of months. So it s just too difficult to predict the length of any phase. In the model growth stages can still be predicted.
Because nothing grows on the phenomenon rate for for for very lengthy amount of time. So you can still predict the growth stage to a certain extent. But maturity stages are very very difficult to predict almost impossible for example a lot of fmcg products. You know.
Which which you can very easily. I ll say like in a heinz mayonese. Ketchups baked beans etc. Colgate toothpaste.
Nescafe. Coffee and very in the various other products. A lot of fmcg products seem to have like a continual maturity stage. Because the demand for them is just continual their everyday essential products.
So they re not they re definitely not going to be getting phased out anytime. Soon. It doesn t seem like it so it they basically go through like an endless maturity phase. So that is where the model actually fails to be honest in a certain way because it is not it is not completely proficient in actually product predicting maturity stages and obviously as we see from our fmcg examples that we just took declines are not absolutely certain for all products.
They can go through endless maturity stages. Which the product. Sorry. Which the model as has no scope or no room for okay hopefully.
That was a good introduction a brief overview or for the the product lifecycle. Model. For you hopefully. That was useful.
And any other any questions as usual please fire away in the comments section. And thank you very much for your attention. And if you liked the video. If you liked all the other videos.
I urge you to check old videos in the channel. Please check them out subscribe to the channel and keep liking and sharing my videos for more content on a more regular basis thank. ” ..
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“The Product Life Cycle Model – The Simplest explanation evernThe Product Life Cycle model is extensively used in Marketing and Sales for forecasting sales and understand the lifespan of products or brands or a portfolio of products or brands. nnAs always, this simple video is derived from expert input and the presentation style is deliberately kept simple and concise as always. nPlease like u0026 share the video and subscribe to this channel to express support. I intend to dedicate time and resources to improve the quality u0026 presentation of future content. nnMusic: http://www.bensound.com”,
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