Life Cycles of Products

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Life Cycles of Products The definition of a product is "anything that is capable of satisfying customer needs", this includes both physical products, like cars, cell phones, machines, as well as services like banking, and insurance. Businesses manage and modify their products over time so that they constantly meet the changing demands of their customers, the methods used to manage a number of brands and product lines is known as Portfolio Managing. The different stages through which these individual products develop in time in terms of the sales they generate is known as Product Life Cycle. A product life cycle is based on the biological life cycle. For example, when a seed is planted in the soil, it is the introduction phase, then it starts to sprout, which is the growth stage, the next stage is maturity, where it grows leaves and roots, finally after a long period it begins to shrink and eventually dies out, which is the decline stage. In theory, a product goes through the same stages. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilizes and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers. The first stage is known as the Introduction Stage. In thi... ... middle of paper ... ...pment. Most companies try to take advantage of their existing strengths when manufacturing new products. This strategy is known as Product Life Extension Strategy, the best example of this would be Coke Cola. In the eighties, there was just one Coke, nowadays we have Diet Coke, Caffeine Free Coke, Cherry Coke, Diet Cherry Coke, Vanilla Coke, Diet Vanilla Coke and not to forget - Coke Classic! Another commonly used strategy used in Brand Franchise Extension is using an existing well known brand to promote new products. An example of this is Nike, who started of with sports shoes, and has now moved into the watch, clothes, accessories market. Sources : 1) Schoell, Dessler, Reincke Introduction to Business, 7th Edition Allyn Bacon Publishing 1993 2) Global Site Product Solutions
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