A product is an item or service that is offered to the consumer to satisfy
his or her needs and to realize organizational goals.
Product Life Cycle
Just like human beings, products have a life cycle, too. They are conceived
(i.e., via research and development), born (i.e., launched), grow,
mature, decline, and eventually, die. There are particular characteristics
of each stage and corresponding marketing implications. Astute marketers
manage the product life cycle to greatest advantage, elongating
the product’s life cycle and/or its generation of cash.
The 6 stages of a product life cycle: introduction, growth, maturity, saturation, decline, and abandonment.
Product Development and Management
What are the key determinants of success or failure?
1. Does the product offer a technological innovation that satisfies a need?
3M’s Thinsulate fabric was a breakthrough in apparel, given its
warmth yet ultra light weight.
2. Is it a better version of a preexisting product?
Coca-Cola’s introduction of New Coke was not perceived by the vast majority of
Coke drinkers as an improvement over the original version.
In fact, it is interesting that Coca-Cola actually gained market
share despite the poor showing of New Coke. Because of all of
the massive advertising that worked at the time by Coke and
Pepsi in the spirit of their arch rivalry, many of the smaller beverage
brands (e.g., Hire’s, Crush, Dr. Pepper) who could not
keep pace in ad spending, were eclipsed in the process. Therefore,
consumer attention was focused on Coke and Pepsi (both of
whom gained in market share that was forfeited by the other
brands).
3. Is it perceived as a good value?
Toyota is not nearly the precision
luxury automobile that the Rolls Royce is. But isn’t it a “better
deal,” pound for pound, dollar for dollar, in utility?
4. Does the product leverage the company’s strength(s)?
It made sense for Dunkin’ Donuts to introduce bagels to its product line, in light
of the company’s demonstrated strengths in baked goods and a
breakfast-oriented and snack-oriented customer base. Conversely,
Boston Market saw its profits shrink as a result of introducing
a line of less expensive sandwiches, which “cannibalized”
the sales of its chicken dinners.
5. Has demand vis-à-vis supply been accurately estimated?
What can be worse than not having your product in stock when customers
want to buy it? Perhaps having too much of your product in
stock with virtually no buyers in sight. Personally, in my own
experience as a consultant, this is a common scenario.
6. Is your organization sufficiently financed to support a product launch
and subsequent maintenance?
More capital and resources may be needed than originally calculated. It is wise to build a wellpadded “cushion” into your budget and to have at the ready contingency
plans in the event of unanticipated events or changes in the marketplace.
his or her needs and to realize organizational goals.
Product Life Cycle
Just like human beings, products have a life cycle, too. They are conceived
(i.e., via research and development), born (i.e., launched), grow,
mature, decline, and eventually, die. There are particular characteristics
of each stage and corresponding marketing implications. Astute marketers
manage the product life cycle to greatest advantage, elongating
the product’s life cycle and/or its generation of cash.
The 6 stages of a product life cycle: introduction, growth, maturity, saturation, decline, and abandonment.
Product Development and Management
What are the key determinants of success or failure?
1. Does the product offer a technological innovation that satisfies a need?
3M’s Thinsulate fabric was a breakthrough in apparel, given its
warmth yet ultra light weight.
2. Is it a better version of a preexisting product?
Coca-Cola’s introduction of New Coke was not perceived by the vast majority of
Coke drinkers as an improvement over the original version.
In fact, it is interesting that Coca-Cola actually gained market
share despite the poor showing of New Coke. Because of all of
the massive advertising that worked at the time by Coke and
Pepsi in the spirit of their arch rivalry, many of the smaller beverage
brands (e.g., Hire’s, Crush, Dr. Pepper) who could not
keep pace in ad spending, were eclipsed in the process. Therefore,
consumer attention was focused on Coke and Pepsi (both of
whom gained in market share that was forfeited by the other
brands).
3. Is it perceived as a good value?
Toyota is not nearly the precision
luxury automobile that the Rolls Royce is. But isn’t it a “better
deal,” pound for pound, dollar for dollar, in utility?
4. Does the product leverage the company’s strength(s)?
It made sense for Dunkin’ Donuts to introduce bagels to its product line, in light
of the company’s demonstrated strengths in baked goods and a
breakfast-oriented and snack-oriented customer base. Conversely,
Boston Market saw its profits shrink as a result of introducing
a line of less expensive sandwiches, which “cannibalized”
the sales of its chicken dinners.
5. Has demand vis-à-vis supply been accurately estimated?
What can be worse than not having your product in stock when customers
want to buy it? Perhaps having too much of your product in
stock with virtually no buyers in sight. Personally, in my own
experience as a consultant, this is a common scenario.
6. Is your organization sufficiently financed to support a product launch
and subsequent maintenance?
More capital and resources may be needed than originally calculated. It is wise to build a wellpadded “cushion” into your budget and to have at the ready contingency
plans in the event of unanticipated events or changes in the marketplace.
