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THE PRODUCT LIFE CYLCE
Introduction
Imagine you had 10.000 Euros to invest, would you invest the money into a company that sells video cassette recorders? Or rather into a firm that sells hybrid engines? Of course you would choose the company with the hybrid engines, but why? The answer to this question lies in one of the most familiar concepts in marketing, a tool to help marketers understand what is happening to their product in the market, what may happen in the future and which strategies are normally appropriate.
THE LIFE CYCLE CONCEPT
The aim of is to arouse your interest in this concept, which is in my opinion simple and complex at the same time.
Let me give you a brief overview of my presentation.
So I’ll begin by showing you the basic life cycle and explaining the most important aspects to you. Then I’ll go on to talk you through the different consumers who are linked with the stages of the life cycle. The different groups of consumers lead us to what companies are really interested in: strategies to maximize profits. Then I’d like to digress for a moment to show you two special life cycles. Then I will move on to the next point: criticism of the life cycle. In the end I’ll summarize the main points of my presentation and I’ll distribute the handouts.
Foil 1:
The life cycle graph:
The concept of the life cycle is based on the theory of Vernon and Hirsch in 1966 and was first found in the growth of the automotive industry from 1900 to 1920. The life cycle can as well be applied to single products, e.g. a flat screen tv, as to the whole industry of televisions.
Managers use life cycles for the following reasons:
- allocation of ...