Introduction to Product Management

Test Marketing and Commercialization

Select Test Cities (Panama City or Dayton Ohio?)

Does skipping test marketing save money?

Sometimes, line extensions are not tested (Quaker Chewy)

Commercialization takes a substantial amount of $ (New Coke)

Some firms “roll out” their products gradually (movies; Pixar)

Product Life Cycle (1)

Product life cycle (4 stages): for product IDEA, not individual firms.

  1. Introduction (phones with net access; plasma TV)

    High marketing costs (inform)

    Slow sales increase

    Low or no profit (Amazon.com)

    Low competition

    Price often high (ex. Calculator)

  2. What other products can you think of that are in introduction?
  3. Product Life Cycle (2)

    Product life cycle (cont…)

  4. Growth (solar changing lens)
  5. High marketing expense (inform and persuade)

    Many small competitors – market entry (athletic apparel)

    Little price competition

    Industry profits rise/peak and sales increasing

What other products are in growth?

Product Life Cycle (3)

  1. Maturity (Beer and Auto)
  2. Industry sales level off; profits down

    Promotions stop rising: moderate marketing expense (persuade)

    Fewer, stronger competitors: tough competition in general

    Many consumers view product as homogeneous; price competition

  3. What other products can you think of that are in maturity?
Product Life Cycle (4)
  1. Decline: being replaced (VCR)
  2. Decrease in industry sales/profits

    Low marketing expense; small groups remain loyal

    Dropouts: few competitors; most gone

❮ Previous ❯ ❮ Next ❯