Product Life Cycle- Decline

You may also discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product. Unit costs may increase with the declining production volumes and eventually no more profit can be made. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.

Every firm in the cosmetics industry has the similar product as yours. It has obtained some loyal customers thats why you have continued to produce the lipstick even though there is increase in production cost. Smoothe, another cosmetic company, is about to introduce an eye shadow-lipstick that changes color with a higher SPF and a moisturizer with Vitamin E.

Lipstick Tombstone- Death of a Product

There are three things you can do: 1) Continue to produce the lipstick for your loyal customers; 2) Add new features to the lipstick to rejuvenate it or 3) Sell the lipstick to another firm that will continue to produce it. What would you do?

Innovate or Die,
Samuel Carrara

p.s. The product doesn’t have to die, just be aware of what is going on and move faster than your competition. Or you may sell off that product line and go into something else just as the decline starts.

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Product Life Cycle- Maturity

At this point, market saturation is reached and prices tend to drop due to the proliferation of competing products. It is important to maintain or increase market share at this stage of the life cycle through brand differentiation and feature diversification (how can you be different in a way that the end use consumer cares). Maybe some features like this picture?

Lipstick with features of a Swiss Army Knife

Now, let’s use the same product from the last blog entry about Product Life Cycle: the lipstick that is both a moisturizer and sunscreen that changes color depending on the wearer’s body temperature. The lipstick is in every woman’s purse and becomes a household name.

All major cosmetic companies are about to start or have started to introduce similar lipsticks. And this has prompted you to further drop the price to keep your customers and attract even more. To keep customers loyal to your brand/product you add new features to the lipstick like being waterproof or bundling the lipstick with matching eye shadow or blush. Is all this enough?

Help Your Product Mature and Not Die,
Samuel Carrara

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Product Life Cycle- Growth

Your advertising and distribution channels have paid off! More consumers are aware of your product in the market and competition is on the rise. Other manufacturers will think of a product that will compete with yours and this will result in a price decrease.

Lipstick with Sunscreen

Picture this, say you came up with a lipstick that is both a moisturizer and a sunscreen that changes color when you change body temperature – when you feel hot your lips will turn hot red and if you feel chilly it turns into neutral pink. You gave samples at Target, WalMart and other stores for customers to try. Anita Wantaproduct, editor-in-chief of American Fashion picked your product as the new “IT” thing of the season.

Because of the feature article in American Fashion, people will become aware about the lipstick and everybody (well at least the women) will want to have one or two for each purse. Lancome and Maybelline came out with a similar lipstick but in a different shade. This may prompt you to reduce your price from the original $10 each to $8.95.

What do you think will happen next? Will it continue to rise and be an item in every woman’s purse? Or will it be just another ordinary lipstick?

Grow Your Sales,
Samuel Carrara

p.s. I don’t think they should directly compete with the other products and lower their price, but that can be discussed later.

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Product Life Cycle- Introduction

For product awareness to pick up, the manufacturer should advertise the product using print, video and audio advertising, along with multiple channels of distribution. They can also spread the word by giving out samples of the products (think of sample booths at Costco or Sam’s Club).

Also non-traditional methods of spreading the marketing message like social media (online videos, social bookmarks, community posting and many other ways) are more ways to help create product awareness. This is a crucial stage in the products “life” it can become the next Cherry Coke or will be discontinued like Pepsi Blue. Both shown below with comments:

Pepsi Blue was launched in the mid2002 and discontinued in 2004. Even with the heavy publicity by Britney Spears and the bands SEV and Papa Roach, it failed to be a household mainstay.

Cherry Coke on the other hand, is the first flavored Coke introduced by Pink Floyd to a test audience at the 1982 World’s Fair. Cherry Coke is available in most of Europe, New Zealand and Japan.

Introduce Your Product,
Samuel Carrara

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In theory, it’s the same for a product. After a period of development, it is introduced or launched into the market (bird drops the seed on the ground); it gains more and more customers as it grows (shoots out leaves and roots); eventually the market stabilizes and the product becomes mature (little seed became a big tree); then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn (death of tree).

Product Life Cycle

To say that a product has a life cycle is to assert four things:

1. That products have a limited life,
2. product sales pass through distinct stages, each facing different challenges, opportunities, and problems to the seller,
3. profit rise and fall at different stages of product life cycle, and
4. products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

However, you must remember that a product life cycle even under normal conditions, to all practical intents and purposes often do not exist. Dhalla & Yuspeh in 1976 criticizes the product life cycles states that:

…clearly, the PLC (Product Life Cycle) is a dependent variable which is determined by market actions; it is not an independent variable to which companies should adapt their marketing programs. Marketing management itself can alter the shape and duration of a brand’s life cycle.

So, the life cycle may be useful as a description, but not as a PREDICTOR; and usually should be firmly under the control of the marketer. The important point is that in many markets, that product or brand life cycle is significantly longer than the planning cycle of the organizations involved.

For more about the product life cycle visit: http://www.samcarrara.com/marketing/product-life-cycle-overview/

The Product Journey,
Samuel Carrara

SC Marketing Education

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