Understand The Product Lifecycle And Marketing Strategies

Understand The Product Lifecyle and Marketing Strategies During Decline

This activity/assignment will help students understand the product life cycle concept better and also give them an insight into the importance of marketing decisions that are to be taken during the market decline phase. Activity: Find four different products that are in the four different phases of the product life cycle. Give your opinions on the product in the market decline phase: whether the company should divest, harvest, or rejuvenate the product and the reasons behind your choices. The assignment is to answer the question provided above in the essay form. This is to be in narrative form and should be as thorough as possible.

Bullet points should not be used. The paper should be at least 1.5 - 2 pages in length, Times New Roman 12-pt font, double-spaced, 1-inch margins, and utilizing at least one outside scholarly or professional source related to marketing management. The textbook should also be utilized. Do not insert excess line spacing. APA formatting and citation should be used.

Paper For Above instruction

The product life cycle (PLC) is a fundamental concept in marketing that describes the stages a product goes through from introduction to decline. Understanding these phases enables marketers to develop strategic decisions tailored to each stage, ensuring the product's longevity and profitability. The four main phases of the PLC are introduction, growth, maturity, and decline. Each phase presents unique challenges and opportunities that shape marketing strategies, resource allocation, and management decisions. By analyzing several products currently in different stages, we can gain insights into the appropriate strategic choices during each phase, most notably during decline, where the decision to divest, harvest, or rejuvenate becomes critical.

In the introduction phase, products are launched into the market, often with high promotional efforts and limited sales volume. One example is a newly introduced electric vehicle (EV) model from a startup company. During the growth phase, products experience increasing sales and market acceptance; a good example here is Apple's iPhone, which consistently gains market share and brand loyalty. The maturity phase involves products that have reached peak sales, such as Coca-Cola soft drinks, which enjoy widespread recognition and stable demand. Finally, the decline phase sees a reduction in sales and market relevance; an example of this is the traditional landline telephone, which has significantly diminished in popularity due to mobile technology.

Focusing on products in the decline phase, strategic decisions are crucial for the company's long-term profitability. I will analyze a fictional example of a traditional point-of-sale (POS) system that has been overtaken by mobile payment solutions. In this scenario, management faces the decision to divest, harvest, or rejuvenate the product line. Harvesting involves reducing investments in marketing and support while continuing to generate cash flows from the existing product. Divestment involves selling or discontinuing the product altogether, freeing resources for more profitable or innovative ventures. Rejuvenation, on the other hand, entails redesigning or repositioning the product to extend its lifecycle, as seen with certain brands that successfully reinvent themselves through innovation or targeted marketing campaigns.

In my opinion, rejuvenation could be an appropriate strategy for a declining traditional POS system if market research suggests niche opportunities or emerging technologies that can be integrated. Rejuvenation could alter the product's perceived value, attract new customer segments, and extend its relevance in a competitive landscape. For instance, a POS system that incorporates contactless payment or cloud-based management could potentially reinvigorate interest among small retailers. However, if the technology becomes obsolete or the market has shifted entirely, divestment may be a more prudent choice, allowing the company to reallocate resources toward more promising innovations in mobile or e-commerce payment solutions.

The decision to harvest this product might be suitable if the company aims to maximize short-term cash flow without significant investment, especially if the product still maintains a modest but steady demand. Nonetheless, this approach poses risks if the market continues to decline rapidly or if competitors outpace the company in innovation. Ultimately, the choice depends on market trends, cost assessments, and potential for reinvention. Empirical evidence from marketing management literature supports that rejuvenation maximizes value when technological or market shifts create opportunities for repositioning, whereas divestment is typically preferred when decline signals the end of the product's relevance (Kotler & Keller, 2016).

In conclusion, strategic decision-making during the decline phase of a product's lifecycle is critical for optimizing resources and maintaining competitive advantage. Companies must carefully evaluate market conditions, technological developments, and potential for innovation before choosing whether to divest, harvest, or rejuvenate. Rejuvenation offers a chance to extend the product's life cycle through innovation, but if market trends forecast rapid obsolescence, divestment may be more advantageous. Effective management of these decisions ultimately influences a company's profitability and long-term growth prospects.

References

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