4. PLC wc

4. PLC wc - 1 Product Life Cycle Keith E. Niedermeier,...

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Unformatted text preview: 1 Product Life Cycle Keith E. Niedermeier, Ph.D. 2 The Product Life Cycle 3 Introduction stage • Market pioneers – very risky – need $$$ • Little competition • Often unprofitable • Highly innovative customers • Two distinct introduction strategies: skim and penetration • When to choose one versus the other? 4 Growth stage • Rapid market growth – Many new competitive entrants – Accelerating acquisition of new customers (“early adopters”) – Initial repeat buying from innovators • Significant gains in profitability • Increasing product differentiation • What about the other 3 P’s? – Answer: It depends on the introduction strategy… 5 Mature stage • Intense competition on all 4 P’s • Clear, fairly static segmentation – Experienced, well-informed buyers – Slowdown in new customer acquisition – No technological breakthroughs • Repeat/replacement sales are key • Squeeze out profits however possible – Niche branding – Differentiation on minor attributes – Cost-cutting • Market share is valued at least as much as profits 6 Decline stage • Sales and profits declining • Virtually no new customers (or firm investments) • Often due to dominant replacement technology • Four basic strategies – Withdraw – Harvest – Niche – Market leadership 7...
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This note was uploaded on 12/18/2010 for the course MKTG 101 taught by Professor Bonfrer during the Spring '08 term at UPenn.

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4. PLC wc - 1 Product Life Cycle Keith E. Niedermeier,...

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