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To understand the new products work we need to look at the way new
products work, we need to look at how they are launched, grow and then
die. the life cycle of a product is from when it hits the shops to
when it is with drawed from the market and a business decides this
when they decide whether or not the product is worth investing in
anymore. Marketing managers need to be aware of what their product is
worth and decide how long their life span is.
This table below shows the five force analysis which shows the stages
of which the products grow through during their life in the market
DEGREE OF RIVALRY
POWER OF BUYERS
POWER OF SUPPLIERS
THREAT OF ENTRANTS
THREAT OF SUBSTITUTES
Rates of growth in the industry and the number of firms.
Will the new product generate sufficient profits?
Will suppliers be willing and able to switch.
Economies of sale.
What substitutes exists?
Whether an extra product could produce over supply in the industry.
Will buyers (retailers) stock the product?
Will the new product or market give the same or higher profits?
Potential retaliation from new existing or new business.
Will customers switch and how much will this cost.
Whether customers can afford to switch/change buying habits.
What incentives can be offered?
Is the infrastructure in place?
How long before a new product can be copied
How loyal are they?
I will at the life cycle of Walkers and see and look at the product
life cycle of some of Walker products. Walkers are brand leaders and
their crisps take over 40% of the shares most of their crisps are
amongst the favourite flavours of the nation and their market share is
2.2 billon of the market shares. Their products will have a life cycle
which will last as they are popular with consumers.
STAGE 1 – INTRODUCTION AND LAUNCH
A new pro duct on the market can be expensive to process.
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stage costs are likely to be higher and profits will be lower. If the
products were in large businesses they will be supported by cash cows.
This stage is partially difficult for new businesses without existing
networks. The Walkers product was made form potato crisps the
beginning of this product was looking good but the success was not.
STAGE 2 – GROWTH AND DEVELOPMENT
During this phase the product should make itself in the market whilst
it is growing the profits should be increasing and the investment
should be covered and paid for. If there is still competition profits
could still be at their highest potential.
STAGES 3 – MATURITY AND COMPETITION
If there is an increase in competition this could lead to extra costs
because of more advertising and promotion. During this time the sales
of products are increasing but still at decreasing rate. Price cuts
and special offers and discounts may be giving to attempt to increase
STAGES 4 – SATURATION AND DECLINE
At this stage the sales are now decreasing and price cuts and
advertising and these are not enough to tempt the customer into buying
these goods. The business may try to attempt to make a sale in a
different way hoping that this will increase the sales.
The product of Walkers has to go through particular stages of
production and development to identify what is important to them and
what this means for the needs of Walkers consumers. Once Walkers
identify an opportunity the product they create needs to be approved
by a panel. Once this is done and been through the product development
it is ready to hit the shop.