Product life cycle. Abstract: The life cycle of a product on the market: phases of development, types of life cycles

Depending on the specifics of individual goods and the specifics of the demand for the bottom, there are different kinds life cycle of goods, differing both in duration and in the form of manifestation of individual phases.

There are the following types of product life cycles:

1. The traditional curve includes distinct periods: introduction, growth, maturity, decline.
2. The classic curve (boom) describes an extremely popular product with stable sales throughout long period time.
3. An Enthusiasm Curve describes a product that has a rapid rise and fall in popularity.
4. Continuous entrainment is similar to the entrainment curve, except that "residual" sales continue at an insignificant share of previous sales.
5. A seasonal curve (fashion curve) occurs when a product sells well over periods of time.
6. A renewal curve (nostalgia) describes a product that is seemingly out of date but has gained popularity again.
7. A failure curve characterizes a product that has had no success at all.

Boom curve describes a very popular product with stable sales over time. An example of such a product would be Pepsi. In the case of such a product life cycle curve, the firm produces the product and makes a profit for a long time.

Entrainment curve... She describes a product with a rapid rise and fall in sales. Often a fashionable, popular product has such a curve. As an example of such a product, one can cite the once fashionable chanterelle glasses, which now cannot even be found on sale.

Continuous entrainment curve... It also describes a popular product, but this product is still preferred by some consumers.

Seasonality curve... A curve for a product that sells well over a period of time. Such a product can be: winter or summer clothes, New Year's souvenirs and much more.

New start curve or nostalgia... The demand for this product falls, but after a while it resumes. An example would be the return to women's platform shoes that were popular in the 70s.

Dip curve... It characterizes a product that almost immediately ceases to be in demand among buyers.

New rise curve... Such a curve is characteristic of products whose sales cease to grow, but after a slight improvement and the appearance of additional useful properties the company manages to increase sales again. Such goods are chewing gum("Orbit", "Dirol"), which at first "become a means for caring for teeth", and then each time they do it better and better by using new components (xylitol) or abandoning the old ones (sugar).

Unsuccessful withdrawal curve... Such a curve is characteristic of products that were unsuccessfully planned and carried out to be launched on the market, but with a repeated attempt to introduce them, they received great success.

TOPIC: THE CONCEPT OF WTC IN THE MARKETING STRATEGY.

1 Marketing strategy at the stage of implementation.

2 Marketing strategy in the growth stage.

3 Marketing strategy at the stage of maturity and saturation.

4 Marketing strategy in the downturn.

Most needs go through stages in their development: origin, growth, maturity, decline. Sometimes a separate stage is distinguished - saturation.

LCI is the result of economic or technological development, as well as the result of the behavior of sellers and buyers. Practice shows that over time, the demand for any product begins to fall.

Any product has its own life cycle of circulation or market presence. In marketing, the life cycle concept considers the dynamics of the competitive stay of a product on the market, therefore, from an economic point of view, it is possible to determine

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Knowing the stages is important to form a marketing mix program. Since its components vary significantly from stage to stage. Determination of the optimal marketing mix during life cycle is one of the most difficult problems marketing. Thanks to correct application sales policy tools, sellers can manage life cycle.

The graph of the dependence of the volume of sales on time.

1 - entering the market 2 - growth 3 - maturity 4 - decline.

There are three types of graphical interpretation: Curve reshaping in a graph occurs for products that themselves change over time and that are affected by sales promotion activities.

1. Curve with repeated cycle.

There is a change in demand as a result

implementation of sales promotion activities at the stage of decline. Examples: fashion change, good advertising, or medicine. 2. The scallop curve. Products that appear in new modifications, that is, with the discovery of new characteristics of a product, new ways of using it and new consumers appear. Examples: nylon appeared, and then stockings, parachutes and other items began to appear. Or Velcro on bags, pampas and other goods.

3. Curve rise, fall, tendency.

New types of modern household appliances.

Fashionable stylish products have their own specific life cycles. The LCT, which are brought to international markets, is very specific, therefore they are divided: - Internal LCT - Global LCT.

FEDERAL AGENCY OF THE RF FOR EDUCATION

STATE INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

MOSCOW STATE INDUSTRIAL UNIVERSITY

INSTITUTE OF DISTANCE EDUCATION.

SPECIALTY: MANAGEMENT

COURSE WORK ON THE DISCIPLINE:

MARKETING ON THE TOPIC:

Product life cycle on the market: development phases, types of life cycles

Performer: 4 year student 1

semester gr. No. Ek.05M21 __________ N.N. Serebrennikov.

Head: ___________ Ishchenko M.M.

Moscow 2008

Introduction. 4

1. Stages of the product life cycle. 6

1.1. Implementation. 7

1.2. Sales growth ... 8

1.3. Saturation (product maturity) 9

1.4. Recession. 10

2. Types of product life cycles. 13

3. Matrix BCG. nineteen

Conclusion. 22

List of used literature .. 24

Abstract .. 24

Introduction

The product is one of the most important categories of the economy as a whole and market economy as such. We all live in the world of goods, every day we purchase goods to meet our ever-growing needs, every day we sell goods. And this statement is true not only in relation to entrepreneurs who are directly involved in the creation and sale of goods and services. This statement is also true for simple "hard workers" who daily carry their special product for sale - their labor. Therefore, knowledge of the characteristics of the "behavior" of a product on the market, in the opinion of the researcher, is necessary not only for people who have their own business, but also for ordinary people.

So, everyone probably faced a situation when buying a new fashionable product at an exorbitant price, after a couple of months you discover that this product is not an "exclusive exclusive", but simply inexpensive consumer goods. This happens especially often in the case of purchase new technology, cell phones, computers. Why is this happening? Another example can be cited: in the 90s, the profession of an accountant was considered one of the most prestigious and highly paid. Today, even an accountant with higher education it can be difficult to find a job, and wage they (with the exception of chief accountants), especially in industry, are often equal to, and sometimes less than, workers "from the machine" who graduated from the 9th grade of secondary school and the local vocational school.

It would seem that the above examples are in no way related to each other, and yet all these are only special cases of such an economic phenomenon as the life cycle of a product (abbreviated as life cycle). For the first time, the concept of life cycle was expounded by Theodore Levit in 1965. The meaning of this concept boils down to the fact that each product is produced and lives on the market for a certain time, i.e. has its own life cycle. Depending on the level of demand for products, their quality, market characteristics, the life cycle of a particular type of product can fluctuate in length over time. It can last from several days to several decades.

Many analysts have concluded that product life is getting shorter;

New products require new investments, which sometimes makes it more profitable to extend the life of an existing product than to create a fundamentally new one;

The life cycle concept allows you to anticipate changes in the tastes of consumers, the actions of competitors and accordingly adapt your marketing plan to the situation;

Knowledge of the concept allows you to form an optimal product range, or product portfolio of the company.

The author of this work believes that it will also be useful for a simple hired employee to study the concept of life cycle. This will allow him to better understand the processes taking place in the markets of professions, and ultimately, thanks to the understanding of these processes, to maximize the profit from the sale of his main product - labor.

Thus, the topic chosen by the student for his term paper, namely, "Product life cycle on the market: phases of development, types of life cycles" is not only relevant today and has a wide "contact audience", but will not lose its relevance in the future, not only for the market economy, but also for other principles economic development.

1. Stages of the product life cycle

Each product, no matter how great consumer properties he did not possess, has a certain period of market stability, i.e. exists on the market for a limited time. Sooner or later, it is ousted from the market by another, more perfect or cheaper product. This phenomenon is called the product life cycle. Here is one of the definitions of this term: the life cycle of a product (LCT) is the time from the moment of the initial appearance of a product on the market until the termination of its sale on the market. This concept describes the marketing of a product, profits, customers, competitors and marketing strategy from the moment a product enters the market to its withdrawal from the market.

Figure 1: Life cycle curve. The solid line indicates the total sales of the industry, the dotted line indicates the total profit of the industry.

Most researchers distinguish 4 phases of the product life cycle: implementation, sales growth, maturity, recession. But some authors, for example S.N. and A.G. Belousov, distinguish the fifth phase - research and product development. But, since this phase is still more production than marketing, the student in his term paper will not focus on it. The remaining 4 phases will be discussed in more detail below.

The decisions that manufacturers make in their product policies depend largely on the stage of the product's life cycle. Therefore, the analysis of the product life cycle is carried out continuously throughout the entire activity of the company, it is the most important task of marketing research, a source of information for making decisions on all issues of product policy. Often, it is difficult to determine the phase of the life cycle of a product, therefore the beginning of a new stage of development is considered to be the moment when a decrease or increase in sales becomes pronounced. Proper marketing can both prolong and shorten the life of a product. Product lifecycle management involves making changes to product, price, sales, communication strategies. These measures are also discussed in more detail below.

1.1. Implementation

This period, the period of the appearance of the product on the market and the gradual increase in the volume of its sales, is the most an important milestone ZhCT. Sales at this stage, as a rule, are not great and largely depend on the degree of novelty of the product. Thus, the growth in sales of modification of an already known product is higher than that of a fundamentally new product. Competition at this time is limited, and production and marketing costs are high.

The main task of marketing services at this phase of the product life cycle is to create a market for new products, which requires high advertising costs, clarification of the properties and qualities of the product. It is necessary to create distribution channels for the implementation of the novelty. It was found that the first buyers of new products are the so-called "innovator" buyers, who make up only about 2% of the total number of potential consumers, as well as "early researchers" - 13.5% of consumers, respectively. These are risk-averse people who enjoy the very status of first-time buyers, as well as people who are quick to accept new ideas. An important stimulating role at this stage is played by the pricing policy, which can be carried out in two directions, depending on the type of product. For prestigious, high-tech, or simply fashionable goods, the policy of "skimming" is most often applied at this stage of the life cycle. setting the highest possible prices for a novelty. An example of such a pricing policy is the price of new personal computers or haute couture clothing. For products of mass demand, as a rule, a policy of "market penetration" is carried out, which is characterized by the establishment of low prices to conquer the market as soon as possible.

1.2. Sales growth

If a product survives the first stage of its life cycle, it enters the sales growth phase. This phase is characterized by rapid growth demand for products. Demand is increasing at the expense of buyers, the so-called. "early majority" (about 35% of buyers). Production costs stabilize, the company starts to make a profit. The emergence of competitors can be attributed to the difficulties at this stage of the life cycle. At this stage of the product's life cycle, the profit from its sale is maximum, so it is not surprising that enterprises are trying to extend this phase. It is at the extension of this stage that the work of marketing services is directed, which use the following means to achieve their goals:

Improvement of the product, improving its quality. It is also possible to add new functions, create varieties of goods.

Promotion of the product image, creation of a brand and the formation of attachment to it, as well as highlighting competitive advantages products.

Intensive sales - increasing the number of retail outlets, penetration into new markets.

Penetration into new market segments.

Some price cuts to attract more consumers.

1.3. Saturation (product maturity)

At this stage of the life cycle, the product already has its own market, and the demand for it becomes massive, since the product is bought by the "belated majority" - 34%, people who are skeptical and perceive the novelty only after the majority has tested it. Sales growth slows down, competition peaks, and profit margins decline. However, it is still quite high, since as a result of a more complete mastering of the technology, there is a decrease in production costs. Therefore, marketers are trying to extend this stage, at least in order to accumulate funds to create a new product. To do this, they are looking for additional sales markets, stimulate more intensification of the consumption of goods by existing buyers. Also, the product is being modified: improving the quality, properties, external design, and looking for new areas of its application. The competitive focus of all forms of promotion is growing. Price policy has a pronounced value orientation, the role of non-price competition is increasing.

1.4. Recession

This is the last phase of the product's life cycle, the phase of a sharp decline in sales and profits. At this stage, the product, which has not undergone any changes, either annoys consumers, or the need that it was intended to satisfy disappears, or is technically obsolete, or does not withstand the competition.

Many businesses are leaving the market as the number of consumers decreases. In this phase, firms can use three courses of action:

The organization can reduce marketing programs and the number of products produced, relying on committed consumers to this product.

You can extend the life of a product by changing the packaging, position on the market, and maneuvering prices.

An enterprise can exclude a product from the nomenclature by discontinuing its release.

The pricing policy at this time is aimed at maintaining the profitability of the product. Prices are often reduced to a minimum in order to get rid of the leftovers of goods in warehouses.

Summing up the chapter, we can give several examples of the correctness of the concept of the product life cycle. One of the clearest examples of this theory, in the opinion of the author of the term paper, is the history of the Motorola Razer V3 cell phone in Russia. On the market of Yekaterinburg, this product appeared around the middle of 2004 and, thanks to its catchy design and technical capabilities, has acquired the status of a fashionable and advanced phone. Prices for it in retail fluctuated in the region of 17-20 thousand rubles. This phone has caused a real boom, especially among young people. It was prestigious to have such a phone. However, just a year later, prices for it fell almost twice - to 10-12 thousand rubles. From an elite toy, it has turned into a stylish, beautiful and fairly affordable product - a wonderful gift for a girl. By this time, Motorola had improved the quality of these products, added new functions to remain competitive, and added a few more to the usual silver color. color solutions housing. At the same time, such companies as Samsung and LG appeared on the market of stylish "girly" phones in Yekaterinburg. By the beginning of 2007, the described phone was already positioned as an inexpensive entry-level phone, i.e. in terms of functions, competitors have gone far ahead. Realizing that in terms of technology, this phone would no longer catch up with its competitors, the company decided to focus on the aesthetic properties of the product (which, according to the author, are still at their best) and added a few more color variations.

But, the era of Razer has already passed. This model could not claim a share in the sector of high-tech middle-class phones, and in the lower price segment it was replaced by cheap Fly and Sagem, and the same ubiquitous Samsung. Prices for this model were already fluctuating in the range of 4200-5000 rubles, but the comparative cheapness of the phone did not help either - at the end of 2007 the model disappeared from the store shelves. An attempt in 2008 to revive the model, modifying it in technological terms and improving the design, did not bring results - the segment of stylish women's phones was firmly occupied by Samsung and LG. Perhaps this is why, as sensational as the appearance of the first Razer was, Razer2 was just as disastrous, which was never able to occupy the intended niche in the cell phone market.

An equally striking example can be cited from the labor market. The managerial profession appeared in Russia after perestroika. In the 90s, it was quite rare and prestigious, and was paid accordingly. Today, almost every university has organizational management in its list of disciplines, many educational institutions secondary and primary vocational education also educates students in this profession. But there are also courses. Thus, by 2005, the number of professional managers (especially the lower and middle management) had increased significantly. Today, there is fierce competition on the market for these vacancies, a dozen applicants with at different levels education, experience, etc. Accordingly, real wages have dropped significantly in comparison with the level of the 1990s. Now it is often equal to or even less than that of employees of "workers" specialties. In order not to be unfounded, the author can give the following figures: the sales manager at the Uralkhimmash plant in Yekaterinburg receives about 15-20 thousand rubles, depending on the length of his work, experience, education, etc. An ordinary turner with secondary vocational education receives 30-35 thousand rubles, because there is a shortage of workers on the market for this profession. Thus, comparing these facts, i.e. aggravation of competition, the need for high costs for training this specialty (if a technical school was also suitable earlier, now most employers are looking for professionals with higher education, and such an education costs many times more), as well as a decrease in the profitability of this profession, we can say that the specialty "manager" has passed the stage of growth and passed to the stage of maturity of the product life cycle.

2. Types of product life cycles

The product life cycle curve shown in Figure 1 can be called ideal or average. In reality, the life cycle curve may have a different shape, since in market practice the life cycle of a product is significantly different from the classical one both in form and in duration. Most researchers distinguish 6 main types of life cycle: "Boom", "Hobby", "Failure", "Renewal", "Comb line", "Seasonality".

An enthusiasm curve describes a product that has experienced rapid ups and downs in popularity. During one season, such a product goes through all stages of the life cycle, from sales growth to its rapid decline. Sellers who have left the market in time get a significant profit, since the volume of sales drops sharply. An example of such a life cycle is toys "Tamagotchi", which almost instantly gained popularity not only among children, but even among the adult population of the country, and in just a few months they almost completely disappeared from the market. A variation of such a cycle is the "Continuous hobby", which is characterized by an increase in sales of a product, and then its rapid decline to the average level of sales. The entrainment curve is shown in Figure 2.

Figure 2: Infatuation Lifecycle Curve.

- "Boom". This type of life cycle describes a popular product with a stable sales over time. An example of this is the products of the Coca-Cola company, which has occupied a leading position in the market for many years. different countries among the producers of soft drinks, and thus allows the producers to obtain the greatest profits. The curve of such a life cycle is shown in Fig. 3.

Fig. 3: Curve of the Boom variant of life cycle cycle.

- “Seasonality” or repeated life cycle occurs when a product sells well over periods spaced out in time. This applies to goods with seasonal demand. For example, the demand for warm clothing, footwear increases several times in autumn and winter, and drops to a minimum in spring-summer period... The seasonal life cycle curve is shown in Figure 4.

Fig. 4: curve of the type of life cycle "Seasonality".

A failure curve describes a product that does not succeed in the market at all and expresses an unsuccessful appearance of the product on the market. To illustrate such a life cycle, we can cite the already mentioned cell phone Motorola Razer 2, which could not repeat the success of its predecessor. The life cycle graph of the "failure" product is shown in Figure 5.

Figure 5: Failure Lifecycle Curve.

Renewal. This curve describes a product that was considered obsolete but became popular again. An example is the renewed demand for old models of cars and furniture. This life cycle curve is depicted in Figure 6.

Figure 6: Resumption Lifecycle Curve.

The scallop curve consists of a sequential series of cycles resulting from the discovery of new characteristics of a product, new ways of using it. A good example nylon serves as such a life cycle: this material finds new areas of application (parachutes, stockings, underwear, carpets and etc.). Such a curve is shown in Figure 7.

Rice. 7: scallop LCG curve.

A.V. Lukina, in her marketing manual, gives another way to classify the varieties of the product life cycle, depending on the type of product. In total, it distinguishes 4 types of goods and, accordingly, 4 forms of life cycle curves: complex goods, simple goods, fashion goods, fancy goods.

A complex product is a product that requires significant training from consumers and, as a result, has a prolonged implementation phase. This is the shape, for example, of the life cycle curve of household computers, since consumers need to realize the benefits of purchasing them or learn to perform familiar tasks in a new way. The life cycle curve of a complex product is shown in Figure 8.

Rice. 8: Life cycle curve of a complex product.

A simple product, on the contrary, finds a quick sale, because consumers easily master it and immediately realize the benefits of purchasing it. Such a product can usually be easily copied by competitors, so the marketing strategy should be to rapidly expand the distribution network. It is also important to have production facilities that can meet the existing demand. One example of such a product can serve as crackers, which, having appeared relatively recently, are already produced under several trade marks... The life cycle of a simple product is shown in Figure 9.

Figure 9: Life cycle curve of a simple product.

Fashionable goods quickly become obsolete and then re-used. The curve presented by the author of the manual for depicting the life cycle of fashionable products is identical to the curve for seasonal products shown in Figure 4. Therefore, the researcher omitted this curve in his work.

Fancy goods such as blotted or scratched car stickers, etc. - are characterized by a fast take-off at the stage of implementation and an equally fast decline. These products usually have unusual new features. The life cycle of a fad product is shown in Figure 10.

Figure 10: The sales curve for a fad product.

However, in the opinion of the author of this coursework, on the present stage the development of scientific and technological revolution and the economy, such a division is losing its relevance. Products move too quickly from one category to another. So, for example, those products that recently fell into the category of "fancy" today are often fashionable, but familiar things. This is true, for example, in relation to the service market. Take nail extensions. Some 10 years ago, for the majority of the population of our country, the very name of such a service was wild, today, if not expensive gel, then at least affordable acrylic nails can boast of many schoolgirls. It's the same with complex and simple products. Take, for example, a topic already beloved by the author (almost painful) mobile phones... In 2000, they clearly belonged to complex goods, after the purchase of which the consumer studied the instructions for a long time, sighing and poking buttons, trying to understand what was what. Today though Cell Phones have become many times more complex and often surpass personal computers of the 2000 model in their complexity and functionality, buyers, having made a purchase, often do not even look at the instructions. And even five-year-old children know how to handle modern telephones (a five-year-old son of a friend serves as a vivid example of this for the author). You can cite and reverse example... In the early 90s washing machine was a very simple product, each hostess understood practically without training what to turn and where to press in order to wash the laundry. Today, a washing machine is a complex computer technology that is not understandable to every housewife (perhaps this is why they break down so often in Russia, and not at all because of scale, as the advertisement claims).

3. BCG matrix

An effective assortment policy provides for the release of a wide range of products, simultaneously including in an optimal ratio products that are different in the stages of the life cycle they pass, but at the same time are on the market. A wide assortment range of products strengthens the company's position in the market and expands the sales volume. At the same time, it is very important to combine various products from the point of view of their profitability, since products of different stages of the life cycle require different investments and bring different profits. The task of the enterprise is to form an optimal product range (portfolio) in which investments and income of the company are balanced. To solve this problem, use the matrix of the Boston Consulting Group (abbreviated matrix BCG). This matrix allows you to determine the place of the product in the market (the market position of the firm) depending on the relative share belonging to it (the ratio of the share of the product of the given firm to the corresponding share of the main competitor) and the growth rate of market demand. This is the most popular scheme for portfolio analysis of a company's business, which allows you to take important decisions in the field of the assortment policy of the company, choose her strategic business units. Any company would like to work in a growing market and offer products that have captured the largest share of it.

The matrix has 4 sectors: high and low market growth rates with a large or small market share belonging to these products. Each sector contains products that have been nicknamed according to their current situation and prospects. This matrix is schematically shown in Figure 11.

Figure 11: BCG Matrix.

"Difficult children" are products that are just entering the market and have a difficult situation. There is a situation "either-or": either to increase efforts and become popular, or to leave the market. Although their sales are growing, as a rule, the company does not have enough own funds to increase its efforts, since its market share, weak market position does not provide the necessary profit. Therefore, the products of this sector need financial support. Investments in these goods are intended to ensure the future profits of the enterprise. This is the position of the product at the stage of market introduction.

Stars are fast-growing, market-leading products that generate significant revenues. However, most of this income must be spent on maintaining a distinctive advantage and leadership position. Hence, these goods only partially cover the costs of production and sale and require additional investment. The goods of this sector are in the stage of growth and strengthening of their positions in the market.

"Cash cows" are products that are actively sold in the market and give great profits. Profits are significantly higher than necessary to maintain the achieved market share. This financial surplus is channeled into financial support for "problem children" and "stars". The position of the goods in this sector is stable and corresponds to the stage of maturity.

"Dogs" or "losers" are goods that are no longer in high demand and have no clear prospects for development. They are in the worst position: they do not generate profits, but they require funds to maintain their position. These goods only draw off the financial resources of the company. They are subject to gradual withdrawal from the market; when special marketing measures are taken to rehabilitate goods, they can move to other, more promising product groups. Goods are in such a weak position. Those who successfully passed the first three and found themselves already at the stage of recession, or goods that the market did not accept at the stage of implementation.

After analyzing the product portfolio using the BCG matrix, the management of the enterprise can see how balanced (optimal) it is, and decide on the future fate of the goods (to start expanding their production or, conversely, to stop production) and, accordingly, on capital investments for each of the products. Practice has shown that the most optimal product portfolio of an enterprise is when most of it is made up of the so-called "cash cows" and "stars", as well as a certain number of "difficult children" who provide penetration into new areas of the market. "Dogs", which are a burden for the company, must be removed from the product range in a timely manner.

Conclusion

To write his term paper, the student chose the topic "The life cycle of a product on the market: phases of development, types of life cycles." For the first time, the concept of life cycle was expounded by Theodore Levit in 1965. The meaning of this concept boils down to the fact that each product is produced and lives on the market for a certain time, i.e. has its own life cycle. Depending on the level of demand for products, their quality, market characteristics, the life cycle of a particular type of product can fluctuate in length over time. It can last from several days to several decades.

The researchers found that the demand for a product does not change randomly, but in a certain way, which can be graphically depicted as a curve. This curve is called the "product life cycle curve". Most researchers distinguish 4 phases of the product life cycle: implementation, sales growth, maturity, recession. Most researchers distinguish 6 main types of life cycle: "Boom", "Hobby", "Failure", "Renewal", "Comb line", "Seasonality".

An effective assortment policy provides for the release of a wide range of products, simultaneously including in an optimal ratio products that are different in the stages of the life cycle they pass, but at the same time are on the market. The task of the enterprise is to form an optimal product range (portfolio) in which investments and income of the company are balanced. To solve this problem, use the matrix of the Boston Consulting Group (abbreviated matrix BCG). The matrix has 4 sectors: high and low market growth rates with a large or small market share belonging to these products. Each sector contains products that have been nicknamed according to their current situation and prospects. These groups of goods are called "problem children" (goods that are just entering the market and have a difficult situation), "stars" (goods in high demand, leading the market, bringing significant income), "cash cows" (goods actively sold on market and giving large profits) and "dogs" (goods that are no longer in high demand and have no clear prospects for development). Practice has shown that the most optimal product portfolio of an enterprise is when most of it is made up of the so-called "cash cows" and "stars", as well as a certain number of "difficult children"

By optimizing the product range, the company can also flexibly respond to the transition of goods from one stage of the life cycle to another. At the first stage - introduction to the market - they usually produce the most popular, basic models that are in high demand among buyers. At the growth stage, the assortment of manufactured products is expanded and, by the stage of maturity, a complete set of products of the entire parametric range (product line) is introduced to the market. In the recession stage, only one or two of the most popular models are left on the market.

List of used literature

1. Belousova S.N., Belousov A.G. Marketing: Tutorial... - Rostov-on-Don: "Phoenix", 2006;

2. Kotler F. Marketing in the third millennium. - M .: AST, 2001.

3. Kotler F. Fundamentals of Marketing. - M., 1990.

4. Lukina A.V. Marketing: A Study Guide. - M .: FORUM: INFRA-M, 2006;

5. Marketing: Textbook / under the editorship of V.A. Zaitsev. - M., 2006;

6. Nozdreva R.B., Tsygichko L.I. Marketing: How to Win the Market. - M .: Finance and statistics, 1991.

7. Proshkina T.P. Marketing: A Study Guide. - Rostov-on-Don: "Phoenix", 2008;

8. Rodin V.P. Marketing estimates. - M., 1992.

9. Solovyov B.A. Marketing: A Textbook. - M., 2005.

10. Marketing theory / edited by M. Baker. - SPb: Peter, 2002.

annotation

To write his term paper, the student chose the topic "The life cycle of a product on the market: phases of development, types of life cycles." The object of this research will be a product, the subject - its "behavior" in the market at various stages of its life cycle. In addition, the author will consider the measures taken by the marketing services of an enterprise - manufacturer in all phases of product development to optimize sales and profit from its implementation. The author sets his tasks:

Study of the phases of the product life cycle (LCT) and its varieties;

Studying the work of the marketing service at all stages of the product life cycle.

The purpose of this study is to identify ways of the most profitable sale of a product at all stages of its life cycle, and, consequently, to increase profits from its sale.

... (often a modification of the first). Sales fall very quickly and only sell off the leftovers. The effect on the curve is a gentler slope during the decay stage. 1.4. Application of types of advertising at different stages of the product life cycle At each stage of the product life cycle, a special approach to advertising is required. The need for this is due to the fact that the economic and competitive environment changes in each ...

Sales support will inevitably drop, and there will be an urgent need to push the market for a replacement product, without additional technical validation and market testing, and may therefore fail. 2. Formation of the assortment policy of the enterprise 2.1 general characteristics CJSC "Ochakovo" as a subject of marketing activities CJSC "OCHAKOVO" - ...

Fig. 2 : curve of life cycle "Enthusiasm".

- "Boom". This type of life cycle describes a popular product with a stable sales over time. The curve of such a life cycle is shown in Figure 3.

Fig. 3 : curve of the "Boom" type of ZhTsT.

- “Seasonality” or repeated life cycle occurs when a product sells well over periods spaced out in time. This applies to goods with seasonal demand. For example, the demand for warm clothes, footwear increases several times in autumn and winter, and drops to a minimum in the spring and summer. The seasonal life cycle curve is shown in Figure 4.

Fig. 4 : curve of the type of life cycle "Seasonality".

A "failure" curve describes a product that has no market success at all and expresses a product failure to market. The life cycle graph of the "failure" product is shown in Figure 5.

Fig. 5 : ZHCT curve "failure".

Fig. 6 : renewal life cycle curve.

The scallop curve consists of a sequential series of cycles resulting from the discovery of new characteristics of a product, new ways of using it. Nylon is a good example of such a life cycle: this material is finding new areas of application (parachutes, stockings, underwear, carpets, etc.). Such a curve is shown in Figure 7.

Rice. 7 : scallop curve of the life cycle.

A.V. Lukina, in her marketing manual, gives another way to classify the varieties of the product life cycle, depending on the type of product Lukin A.V. Marketing: A Study Guide. - M .: FORUM: INFRA-M, 2006. Pages 128-129 .. In total, it distinguishes 4 types of goods and, accordingly, 4 forms of life cycle curves: complex goods, simple goods, fashion goods, fancy goods.

Complex product is a product that requires significant training from consumers and which, as a result, has a prolonged implementation phase. This is the shape, for example, of the life cycle curve of household computers, since consumers need to realize the benefits of purchasing them or learn to perform familiar tasks in a new way. The life cycle curve of a complex product is shown in Figure 8.

Rice. eight : Life cycle curve of a complex product.

Simple product on the contrary, it finds a quick sale, because consumers easily master it and immediately realize the benefits of purchasing it. Such a product can usually be easily copied by competitors, so the marketing strategy should be to rapidly expand the distribution network. It is also important to have production facilities that can meet the existing demand. One example of such a product is crackers, which, having appeared relatively recently, are already produced under several trade marks. The life cycle of a simple product is shown in Figure 9.

Fig. 9 : life cycle curve of a simple product.

Fashionable goods quickly become obsolete and then re-used. The curve presented by the author of the manual for depicting the life cycle of fashionable products is identical to the curve for seasonal products shown in Figure 4. Therefore, the researcher omitted this curve in her work.

Fad Products, for example, stickers for cars, phones, laptops in the form of blots or scratches, etc. - are characterized by a fast take-off at the stage of implementation and an equally fast decline. These products usually have unusual new features. The life cycle of a fad product is shown in Figure 10.

Fig. 10 : sales curve of a fad product.

However, in my opinion, at the present stage of development of scientific and technological revolution and the economy, such a division is losing its relevance. Products move too quickly from one category to another. So, for example, those products that recently fell into the category of "fads" today are often fashionable, but familiar things. This is true, for example, to take at least the topic of mobile phones. In 2000, they clearly belonged to complex goods, after the purchase of which the consumer studied the instructions for a long time, sighing and poking buttons, trying to understand what was what. Today, although cell phones have become many times more complex and often surpass personal computers of the 2000 model in terms of their complexity and functionality, buyers, having made a purchase, often do not even look at the instructions. And even five-year-olds know how to handle modern telephones.

The economic development of a product has a complex cyclical nature, as a result of which the problem of the nature, types, frequency of cyclical fluctuations is important for identifying external causes crisis of specific products. the main objective life cycle management of a specific product - to extend the period of its existence on the market.

LIFE CYCLE OF GOODS (LCT)- a process consisting of successively advancing stages of the birth of an idea, the development of a product, the foundation of its production, an increase in market sales, obsolescence, a decline and termination of production, replacement by a new, more progressive product. Practically all goods produced by people are forced to go through such a cycle over different periods of time, and the concept of the life cycle is based on the fact that any product, no matter how exceptional it may have, will sooner or later be ousted from the market by others, more advanced or cheaper.

When we talk about life cycle, we mean the following:

1) the life of the goods is limited;

2) the volume of sales of a product includes several stages, each of which is characterized by specific tasks, opportunities and problems;

3) on different stages life cycle, the profit that the product brings varies;

4) each stage of the life cycle requires a special approach to the strategy in the field of marketing, finance, production, sales and personnel management.

This concept implies that the product goes through a number of stages: product development; bringing goods to market; growth; maturity; decline.

Rice. 8.2.1. Sales volume and accumulated profit graphs

At the product development stage, product samples are created that claim to be novelties on the basis of scientific research, design, engineering, technological development and testing. It is generally accepted that the process of creating a new product includes the formation of an idea, the selection of progressive ideas, the development of an idea and its experimental verification, the formation of a marketing strategy for a new product, an analysis of the possibilities of production and sale of goods, design and engineering development, serial production, testing of the first batches of goods in market conditions. commercial production.

The stage of bringing a product to the market begins from the moment the product is launched into commercial production, when it goes into mass sale. At this stage, the manufacturing company still does not make a profit as a result of the fact that the firm's costs continue to increase, which began with the development of the product, the costs are not yet paid off by sales income despite the increase in sales and the ability to sell a new product at a higher price in comparison with obsolete goods.

At the growth stage, if a new product meets the market requirements, the object of its sale begins to increase, the demand for the product increases. By increasing the volume of sales, production becomes profitable, the mass of profits increases. Gradually, the initial costs of the manufacturer of the goods are paid off by profit.

In the phase of maturity, the growth rate of sales of a product slows down and by the end of this stage it reaches zero due to saturation of demand and a decrease in customer interest in the product with a simultaneous increase in sales revenue until it reaches a maximum and begins to decline. Most often, by this time, the manufacturer of the goods manages to fully recoup the costs of the profit received, but the additional profit becomes less and less.

Decline stage - a period of a sharp decline in sales due to a decrease in demand from consumers. As a result of a decrease in sales, profit becomes less and less, there comes a time when the proceeds from the sale of goods do not compensate for the costs of production and distribution. Production becomes unprofitable, and the time comes to curtail, stop production and sale of goods. The product life cycle ends.

The reasons for the "aging" and "dying" of the product can be the following factors:

Demand potential has been exhausted;

Changes in the structure of demand (changes in the structure of the population, changes in values, falling purchasing power);

Technical progress;

Changing economic conditions.

In this case, the main task of the marketing department is to closely monitor changes in sales and profits in order to catch the boundaries of the stages and, accordingly, make changes to the marketing program. The main marketing actions that should be performed by marketing managers at various stages of the product life cycle can be illustrated in table. 8.2.1.

Table 8.2.1 Main characteristics of the stages of the product life cycle and typical marketing actions of the enterprise

	Product life cycle stages
	Creation, development	Market introduction	Growth	Maturity	Decline
	CHARACTERISTICS
Sales	None, possible dangerous sales	Weak	Fast-growing	Slow growing	Falling, searching for new products
Profit	Missing	Minimum or zero-left profit, loss	The greatest	Stabilizes and begins to decline	Low or zero
Consumers	No	Lovers of the new	Expanding mass market	Mass market	Conservative
Number of competitors	No or single, potential	Small	Increasing	Big	Overwhelming
Production	Training	Mastering	Large serial	Maximum	Shrinking
	MARKETING ACTIONS OF THE ENTERPRISE
Major Strategic Efforts	Finding a niche in the market	Market expansion	Market position approval	Defending your share of the profit	Maintaining profits, reducing costs
Marketing costs	Increasing	High	High but decreasing	Reducing	Low
R&D	Research and design	Refinement of products	Improvement, modernization	Modernization	Search for a replacement
To-var distribution	No	Uneven	Intensive	Intensive	Selective
Price setting	Trial	High	Average	Low	Lowest
Product	Design, prototypes	Basic option	Improved	Differentiated	Selective

The concept of a life cycle can be applied to individual products (brands), as well as to entire classes of products. The duration of the life cycle of commodity classes is significantly higher than that of individual brands of goods of this class, since an obsolete brand can be replaced by a new brand of goods of the same class.

The concept of the life cycle of goods plays a fundamental role in marketing, since different stages of the life cycle correspond to different strategies and marketing techniques, as a result of which the company's product strategy is constantly changing. Therefore, the product life cycle curve does not always look the same. One common variation is the “re-cycle” curve. The second sales “hump” is caused by sales promotions carried out during the declining phase of the product. Another type is the "scallop" curve), consisting of a sequential series of cycles generated by the discovery of new characteristics of the product, new ways of using it, and the emergence of new users.

Rice. 8.2.2. Varieties of life cycle curves

The life cycle concept can be applied to well-known phenomena such as style, fashion or fetish.

Style is the main peculiar form of expression that arises in a particular area human activity... For example, there are styles in clothing (evening, casual) and art (realistic, surreal, abstract). Once created, a style can exist for many generations, gaining wide popularity, then losing it. The style is characterized by a cycle with several periods of heightened interest.

Fashion is the most popular or widespread style at a given time in this field of activity. The duration of an individual stage in a fashion cycle is very difficult to predict.

Fetishes are private manifestations of fashion that quickly gain widespread attention, are perceived with great enthusiasm, quickly peak in popularity and very quickly go into decline.

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Maslova TD Vozhuk ST., Kovalik L.N. Marketing. - SPb .: Peter, 2008 .-- P. 180.

Stukanova I.P., Nikitina L.A., Dubrovin I.L. Management and marketing. - M .: Colossus, 2007 .-- S. 144.

A. I. Klimin Marketing: a course of lectures. - M., 2005 .-- S. 45.

E.P. Kolesneva Commodity policy of the industry enterprise. - Minsk: Information and Computing Center of the Ministry of Finance, 2007 .-- P. 35.

Laptev A.L., Konev I.P., Silantyeva L.P. Strategic and operational marketing. - Petrozavodsk: Publishing house of PetrSU, 2006 .-- P. 77.

Maslova TD., Bozhuk S.G., Kovalik L.N. Marketing. - SPb .: Peter, 2008 .-- S. 163-165.

Tutorial output:

Marketing: Questions and Answers / ed. N.P. Ketova. - Rostov n / a: Phoenix, 2009 .-- 478 p. - (We pass the exam).