6 Numerous product classes or industries are in the decline stage of their

6 numerous product classes or industries are in the

This preview shows page 8 - 10 out of 24 pages.

6 Numerous product classes or industries are in the decline stage of their product life cycle. Two prominent examples include analog TVs and desktop personal computers. Products in the decline stage tend to consume a disproportionate share of management and financial resources relative to their future worth. A company will follow one of two strategies to handle a declining product: deletion or harvesting. Page 296 Marketing Matters Customer Value Will E-mail Spell Extinction for Fax Machines? Technological substitution that creates value for customers often causes the decline stage in the product life cycle. Will e-mail replace fax machines? This question has been debated for years. Even though e-mail continues to grow with broadening Internet access, millions of fax machines are still sold each year. Industry analysts estimated that the number of e-mail mailboxes worldwide would be 5.2 billion in 2018. However, the phenomenal popularity of e-mail has not brought fax machines to extinction. Why? The two technologies do not directly compete for the same messaging applications. E-mail is used for text messages. Faxing is predominately used for communicating formatted documents by
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business users, notably doctors, concerned about Internet security. Fax usage is expected to increase through 2018, even though unit sales of fax machines have declined on a worldwide basis. Internet technology and e- mail may eventually replace facsimile technology and paper and make fax machines extinct, but not in the immediate future. Deletion Product deletion, or dropping the product from the company's product line, is the most drastic strategy. Because a residual core of consumers still consume or use a product even in the decline stage, product elimination decisions are not taken lightly. For example, Sanford Corporation continues to sell its Liquid Paper correction fluid for use with typewriters in the era of word-processing equipment. Harvesting A second strategy, harvesting, is when a company retains the product but reduces marketing costs. The product continues to be offered, but salespeople do not allocate time in selling nor are advertising dollars spent. The purpose of harvesting is to maintain the ability to meet customer requests. Coca-Cola, for instance, still sells Tab, its first diet cola, to a small group of die-hard fans. According to Coke's CEO, “It shows you care. We want to make sure those who want Tab, get Tab.” 7 Three Aspects of the Product Life Cycle Some important aspects of product life cycles are (1) their length, (2) the shape of their sales curves, and (3) the rate at which consumers adopt products. Length of the Product Life Cycle There is no set time that it takes a product to move through its life cycle. As a rule, consumer products have shorter life cycles than business products. For example, many new consumer food products such as Frito-Lay's Baked Lay's potato chips move from the introduction stage to maturity in 18 months. The availability of mass communication vehicles informs consumers quickly and shortens life cycles. Technological change shortens product life cycles as new-product innovation replaces existing
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