Product Management and New Product Development

Product Management and New Product Development - Managing...

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Managing Products over their Life cycles Product Lifecycle:  describes the stages of a really new product idea goes through from  beginning to end.  Market Introduction Sales are low as a new idea is first introduced into a market. Customers are not looking for the product even though it is a great idea.  Market Growth Industry sales grow fast – but industry profits rise and start falling.  Competitors see the opportunity within the market, which is why industry profits begin to  drop.  This is the time of the biggest profits for the industry Market Maturity Occurs when industry sales level off and competition gets tougher.  Industry profits decline throughout the market maturity stage because promotion costs  rise and some competitors cut prices to attract business. Late entries into the market attempt to take a share of the saturated market from  established firms. Persuasive promotions becomes even more important during this stage because  products may only differ slightly.  Sales Decline New products replace the old ones.  Price competition from dying products becomes more vigorous – but firms with strong  brands may make profits until the end because they have successfully differentiated  their products. Product life cycles should be related to specific markets PLCs describe industry sales and profits for a product idea within a particular product  market.  Individual brands may not follow the PLC pattern Products may experience quick deaths Each market should be carefully defined Product life cycles vary in length
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It is more important to expect and plan for different stage than to know the precise  length of each cycle.  Products more through the early stages of the PLC if it has: A competitive Advantage Easy to use Advantages are easy to communicate Can be tried on a limited basis Product is compatible with the values and experiences of target customers. 
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This note was uploaded on 02/23/2012 for the course BUSI 406 taught by Professor Perreault during the Fall '11 term at UNC.

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Product Management and New Product Development - Managing...

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