Monday, March 11, 2019
Product Life Cycle Essay
DefinitionProducts come and go. A companys contest is to h gray on to its customers longer than it holds on to its crossroads. It needs to hear the trade life cycle and the customer life cycle to a greater extent than the crop life cycle. Someone at Ford realized this If were non customer driven, our cars wont be either. One selects market tools that argon appropriate to the make up of the proceedss life cycle. For example, ad and publicity will produce the biggest payoff in the introduction stage of a ware their job is to build consumer awareness and interest. Sales promotions and fount-to-face selling grow more important during a productions maturity stage. Personal selling stooge strengthen customers comprehension of your products advantages and their conviction that the offering is worthwhile.Product Development and Life-Cycle St ordaingiesIn the face of changing customer needs, technologies and competition, product innovation or the increase of peeled products has become vital to a companys survival. Introducing invigorated products, however, is not sufficient. The mansion must also know how to manage the virgin product as it goes through its life cycle that is, from its birth, through growth and maturity, to eventual(prenominal) demise as newer products come along that better serve consumer needs.This product life cycle presents two principal challenges. First, because all products eventually decline, the planetary house must find new products to replace ageing ones (the problem of new-product vexment). Second, the firm must understand how its products age and adapt its marketing strategies as products bechance through life-cycle stages (the problem of product life-cycle, strategies). We therefore look initially at the problem of finding and underdeveloped new products, and then at the challenge of managing them successfully over their life cycles. entry and in the raw-Product DevelopmentGiven the fast changes in taste, technol ogy and competition, a company stinkpotnot rely solely on its existing products to sustain growth or to maintainprofitability. The firm can hope to maintain market and profit performance only by continuous product innovation. Product innovation encompasses a variety of product development activities product improvement, development of entirely new ones, and extensions that increase the cuckold or number of lines of product the firm can offer. Product innovations are not to be confused with inventions. The latter are a new technology or product which may or may not deliver benefits to customers. An innovation is defined as an idea, product or maculation of technology that has been developed and marketed to customers who perceive it as novel or new.We may call it a process of identifying, creating and delivering new-product values or benefits that were not offered forrader in the marketplace. In this chapter we look specifically at new products as opposed to value creation throu gh marketing actions (such as product/brand repositioning, segmentation of current markets). We also need to distinguish among obtaining new products through acquisition by buying a total company, a patent or a licence to produce individual elses product and through new-product development in the companys own research and development department.As the costs of developing and introducing major(ip) new products flummox climbed, many large companies have decided to admit existing brands rather than to create new ones. Other firms have rescue money by copying competitors brands or by reviving old brands. These routes can contribute to a firms growth and have both advantages and limitations. In this chapter, we are mainly concerned with how businesses create and market new products. By new products we mean airplane pilot products, product improvements, pnxhict modifications and new brands that the firm develops through its own research and development efforts.Risks and Returns J ri InnovationInnovation can be very risky for a number of reasons1. New-product development is an expensive affair it cost Tate & Lyle around 150 trillion to develop a new sugar substitute pharmaceutical firms spend an fair(a) of .100-50 million to develop a new drug while developing a super-jumbo project could cost one million millions.2. New-product development takes time. Although companies can dramatically abbreviate their development time, in many industries, such asPharmaceuticals, biotechnology, aerospace and food, new-product development cycles can be as long as 10-15 years. The uncertainty and unpredictability of market environments further raise the risks of commercialization. Roots had to withdraw Manoplex, a heart drug, less(prenominal) than a year afterwards its launch in the United Kingdom, after a trial on 3,000 patients in the United States and Scandinavia suggested an adverse printing on patient survival. The pharmaeeudeals division lost about 200 million on the drug, which cost nearly 100 million to develop over a period of 12 years, and about S20 million was spent on promoting and marketing it.3. Unexpected delays in development are also a problem. History is littered with grand pioneering engineering projects which have failed to satisfy the original expectations of bankers, investors and politicians. The Seikan rail tunnel, connecting the island of Hokkaido to mainland Japan, was completed 14 years late and billions of pounds over compute the S10 billion cost of the Channel tunnel, which opened on 6 may 994, a year later than originally planned, is more than double the 4,8 billion forecast in 1987.4. The new-product success record is not encouraging either. New products continue to fail at a disturbing rate. One new-made study estimated that new consumer packaged goods (consisting mostly of line extensions) fail at a rate of 80 per penny. The same high failure rate appears to afflict new financial products and services, such as credit cards, damages plans and brokerage services. Another study found that about 33 per cent of new industrial products fail at launch.Despite the risks, firms that learn to pioneer well become less vulnerable to attacks by new entrants which delineate new ways of delivering added values, benefits and solutions to customers problems.