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

Depending on the specifics of individual goods and the particular demand for the bottom, there are various types of the life cycle of goods, which differ both in duration and in the form of manifestation of individual phases.

The following types of product life cycles are distinguished:

1. The traditional curve includes distinct periods: introduction, growth, maturity, decline.
2. The classic curve (boom) describes an extremely popular product with stable sales over a long period of time.
3. The hobby curve describes a product that receives a quick rise and fall in popularity.
4. Long-term enthusiasm manifests itself in the same way as the enthusiasm curve, except that the “residual” sales continue in amounts that make up a small fraction of the previous sales volume.
5. A seasonal curve (fashion curve) occurs when a product sells well over periods of time.
6. The renewal curve (nostalgia) describes a product that, it would seem, is outdated, but has again gained popularity.
7. The failure curve characterizes a product that was not successful at all.

Curve boom 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 goods and makes a profit for a long time.

Hobby curve. She describes a product with a quick rise and fall in sales. Often such a curve has a fashionable, popular product. An example of such a product is the once fashionable fox glasses, which now can not even be found on sale.

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

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

New start or nostalgia curve. Demand for this product falls, but after some time it resumes. An example would be a return to platform shoes that were popular in the 70s.

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

New Rise Curve. This curve has 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. Chewing gums (“Orbits”, “Dirol”), which first “become a tool for dental care,” and then each time do it better and better through the use of new components (xylitol) or refusal to use the old ones, are such goods ( sugar).

Failure Curve. Such a curve has goods whose launch on the market was unsuccessfully planned and carried out, but with a second attempt to launch, they received great success.

TOPIC: GCT CONCEPT IN THE MARKETING STRATEGY.

1 Marketing strategy at the implementation stage.

2 Growth marketing strategy.

3 Marketing strategy at the stage of maturity and saturation.

4 Recession marketing strategy.

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

DHC is the result of economic or technical development, as well as 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 circulation or presence on the market. In marketing, the concept of LCT considers the dynamics of the competitive stay of goods on the market, therefore, from an economic point of view, you can determine

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The knowledge of the stages is important for the formation of a marketing mix program. Since its components vary significantly from stage to stage. Determining the optimal marketing mix during the life cycle is one of the most difficult marketing issues. Thanks to the correct use of sales policy tools, sellers can manage the DHC.

Graph of sales versus time.

1 - market entry 2 - growth 3 - maturity 4 - decline.

There are three types of graphical interpretation: The modification of the curve on the graph takes place with respect to goods that themselves change over time and that are affected by sales promotion measures.

1. The recycle curve.

There is a change in demand due to

implementation of sales promotion measures at the decline stage. Examples: fashion change, with good advertising or medicine. 2. Scallop curve. Products that appear in new modifications, that is, with the discovery of new product characteristics, 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, on pampas and other goods.

3. Curve rising, falling, tende.

New types of modern household appliances.

Fashionable stylish products have their own specific life cycles. It is very specific to the gastrointestinal tract, which are marketed on international markets, therefore they share:

EDUCATION FEDERAL AGENCY OF THE RUSSIAN FEDERATION

STATE INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

MOSCOW STATE INDUSTRIAL UNIVERSITY

INSTITUTE OF REMOTE EDUCATION.

SPECIALTY: MANAGEMENT

COURSE WORK ON DISCIPLINE:

TOPIC MARKETING:

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

Artist: 4 year student 1

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

Head: ___________ M. Ishchenko

Moscow 2008

Introduction 4

1. The 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. ten

2. Types of product life cycles. 13

3. The matrix of BCG. nineteen

Conclusion 22

List of references .. 24

Abstract .. 24

Introduction

A product is one of the most important categories of the economy as a whole and a market economy as such. We all live in the world of goods, every day we purchase goods to satisfy 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 features of the "behavior" of the goods on the market, in the researcher's opinion, is necessary not only for people who have their own business, but also for ordinary people.

So, everyone probably came across a situation when buying a new fashionable product at a sky-high price, after a couple of months you find that this product is not an "exclusive exclusive", but just an inexpensive consumer goods. Especially often this happens when acquiring new equipment, cell phones, computers. Why is this happening? Another example can be given: in the 90s, the profession of an accountant was considered one of the most prestigious and highly paid. Today, even an accountant with a higher education can find it difficult to find a job, and their salaries (with the exception of chief accountants), especially in industry, are often equal to, and sometimes even less than, workers “off the bench” who graduated from high school 9 and local vocational schools.

It would seem that the above examples are in no way interconnected, but meanwhile all these are just special cases of such an economic phenomenon as the life cycle of a product (abbreviated LCT). The concept of a gastrointestinal tract was first presented by Theodore Leviticus in 1965. The meaning of this concept comes 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 the product, its quality, market features, the life cycle of a particular type of product may vary over time. It can last from several days to several tens of years.

According to many analysts, the life of the product 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 LCT concept allows one to anticipate changes in the tastes of consumers, the actions of competitors and accordingly adapt their plan of marketing events to the situation;

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

The author of this work believes that it will also be useful for a simple employee to study the concept of life-cycle housing. This will allow him to better understand the processes occurring in the markets of professions, and ultimately, thanks to an understanding of these processes, 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 in the Market: Development Phases, Types of Life Cycles” is not only relevant today and has a broad “contact audience”, but it will not lose its relevance in the future, not only for a market economy, but also for other principles of economic development.

1. Stages of the product life cycle

Each product, no matter how excellent consumer properties it possesses, has a certain period of market stability, i.e. exists on the market for a limited time. Sooner or later, it is being squeezed out of the market by another, more advanced or cheaper product. This phenomenon is called the product life cycle. Here is one of the definitions of this term: product life cycle (LCT) - this is the time from the time the product first appeared on the market until its sale on the market ceased. This concept describes the sale of a product, profit, consumers, competitors and a marketing strategy from the moment a product enters the market until it is withdrawn from the market.

Fig. 1: LC curve. The solid line indicates the total industry sales; the dotted line is the total industry profit.

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 development of goods. But, since this phase is still more productive than marketing, the student in his term paper will not begin to draw his attention to it. The remaining 4 phases will be discussed in more detail below.

The decisions that manufacturers make in their product policies largely depend 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 an LCT product, so the beginning of a new stage of development is considered the moment when a decrease or increase in sales becomes pronounced. Competent marketing can both extend and shorten the life of the product. Product lifecycle management involves making changes to product, pricing, marketing, and 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 a gradual increase in its sales, is the most important stage of the life cycle. Sales at this stage, as a rule, are not large and largely depend on the degree of novelty of the product. Thus, the sales growth of modifications of an already known product is higher than that of a fundamentally new product. Competition at this time is limited, and the costs of production and marketing are high.

The main objective of marketing services at this phase of the product life cycle is to create a market for new products, which requires high costs for its advertising, clarification of the properties and qualities of the goods. It is necessary to create sales channels for the implementation of new items. It was established that 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, become the first buyers of new products. These are risk-prone individuals who like the status of first-time buyers in themselves, as well as people who quickly accept new ideas. An important stimulating role at this stage is played by pricing policy, which can be carried out in two directions, depending on the type of product. For prestigious, high-tech, or simply fashionable products, the "skimming cream" policy is most often applied at this stage in the LCT, i.e. setting the highest prices for the new product. An example of such a pricing policy is the price of new personal computers, or haute couture clothing. For products of mass demand, usually, a policy of "penetration of the market" is carried out, which is characterized by the establishment of low prices for the speedy conquest of the market.

1.2. Sales growth

If a product survives at the first stage of its life cycle, it goes into a phase of sales growth. This phase is characterized by a rapid increase in demand for products. Demand increases due to buyers, so-called. "early majority" (about 35% of buyers). Production costs are stabilizing, the company begins to make a profit. The difficulties at this stage of the life cycle include the appearance of competitors. At this phase of the product’s life cycle, the profit from its sale is maximum, therefore it is not surprising that enterprises seek to extend this phase. It is to extend this stage that the work of marketing services is directed, which use the following means to achieve their goals:

Product improvement, improving its quality. It is also possible to add new functions, create varieties of goods.

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

Intensive sales - an increase in the number of outlets, penetration into new markets.

Penetration into new market segments.

Some price cuts to attract more consumers.

1.3. Saturation (product maturity)

At this phase of the life cycle, the product already has its own market, and demand for it becomes massive, as the product is bought by the "belated majority" - 34%, people who are skeptical and perceive the new product only after the majority has tested it. Sales growth is slowing down, competition is peaking, profit margins are declining. However, it is still quite high, because as a result of a more complete development of the technology, production costs are reduced. Therefore, marketers seek to extend this stage, if only in order to accumulate funds to create a new product. To do this, they are looking for additional markets, stimulate more intensification of the consumption of goods by existing customers. Modification of the goods is also carried out: improvement of quality, properties, external design, a search for new areas of its application is ongoing. The competitive orientation of all forms of promotion is growing. Pricing 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 life cycle, a phase of a sharp decline in sales and profits. At this stage, the product, which has not undergone any changes, either bothers consumers, or the need disappears, which it was designed to satisfy, or technically becomes obsolete, or does not withstand competition.

Many enterprises leave the market, as the number of consumers is reduced. In this phase, firms can use three options:

The organization can reduce marketing programs and the number of manufactured goods, rely on committed customers to this product.

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

An enterprise may exclude goods from the nomenclature by discontinuing its release.

Pricing policy at this time is aimed at maintaining the profitability of the goods. Prices are often reduced to a minimum in order to get rid of product balances 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 brightest 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. This product appeared on the market of Yekaterinburg around the middle of 2004 and, thanks to its catchy design and technical capabilities, acquired the status of a fashionable and advanced phone. Prices for it in retail trade fluctuated around 17-20 thousand rubles. This phone has caused a real boom, especially among young people. Having such a phone was prestigious. However, only a year later, its prices fell almost twice - to 10-12 thousand rubles. From an elite toy, he turned into a stylish, beautiful and reasonably affordable product - a wonderful gift for a girl. By this time, Motorola had improved the quality of these products, added new features to remain competitive, and added a few more colors to the regular silver color. At the same time, such companies as Samsung, LG appeared on the market of stylish "girl" 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 the technological plan this phone will not catch up with its competitors, the company decided to focus on the aesthetic properties of the product (which, according to the author, is still at its best) and added a few more color variations.

But, the era of Razer has passed. This model could not claim a share in the mid-tech mobile phones sector, and in the lower price sector it was replaced by the cheap Fly and Sagem, which appeared on the market, and the same ubiquitous Samsung’s. The prices for this model fluctuated between 4200-5000 rubles, but the phone did not save the comparatively cheap price - already at the end of 2007 the model disappeared from store shelves. An attempt in 2008 to revive the model, having refined it technologically and improving the design, did not bring any result - the segment of stylish female phones was firmly occupied by Samsung and LG. Perhaps this is why the sensational appearance of the first Razer’s was just as disastrous as the Razer2, which could not occupy its intended niche in the cell phone market.

An equally vivid example can be given from the labor market. The profession of manager appeared in Russia after perestroika. In the 90s, it was quite rare and prestigious, and paid accordingly. Today, almost every university has organization management in its list of disciplines, and many educational institutions of secondary and primary vocational education also teach students in this profession. But there are also courses. Thus, by 2005, the number of professional managers (especially lower and middle managers) has increased significantly. Today, there is fierce competition in the market for these vacancies; dozens of applicants with different levels of education, experience, etc. can apply for the same manager position. Accordingly, real wages decreased significantly compared to the level of the 90s. Now it is often equal and even less than that of employees of the "workers" specialties. In order not to be unfounded, the author can cite the following figures: the sales manager at the Uralhimmash plant in Yekaterinburg receives about 15-20 thousand rubles, depending on the duration 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 in the market of this profession. Thus, comparing these facts, i.e. increased competition, the need for large expenses for training in this specialty (if the college was previously suitable, now most employers are looking for professionals with higher education, and such an education costs several times more), as well as a decrease in the profitability of this profession, we can say that the specialty "manager" went through the growth stage and moved to the stage of maturity of the product life cycle.

2. Types of product life cycles

The product life cycle curve shown in Fig. 1 can be called ideal or averaged. 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 identify 6 main varieties of gastrointestinal tract: “Boom”, “Passion”, “Failure”, “Renewal”, “Scallop line”, “Seasonality”.

The hobby curve describes a product that receives a quick rise and fall in popularity. Within one season, such a product undergoes all stages of the life cycle, from sales growth to its rapid decline. Significant profits come from sellers who promptly leave the market, since sales volume drops sharply. An example of such a gastrointestinal tract is Tamagotchi toys, which almost instantly gained popularity not only among children, but even among the country's adult population, and after only a few months almost completely disappeared from the market. A variation of this cycle is "Continuous enthusiasm", which is characterized by an increase in sales of goods, and then its rapid decline to an average level of sale. The drag curve is shown in Figure 2.

Fig. 2: Curve of the RC “Entrainment”.

- The boom. This type of LCT describes a popular product with stable sales over time. An example here is the products of Coca-Cola, which for many years has been a leader in the market of different countries among manufacturers of soft drinks, and thereby allows manufacturers to get the most profit. The curve of such an LC is shown in Fig. 3.

Fig. 3: Variety of RC “Boom” variety.

- “Seasonality” or a repeated life cycle takes place when a product is selling well over periods of time. This applies to seasonal goods. For example, the demand for warm clothes and shoes increases several times in the fall and winter, and drops to a minimum in the spring and summer. The seasonal LC curve is shown in Figure 4.

Fig. 4: a curve of the seasonality type of LC.

The failure curve describes a product that is generally unsuccessful in the market and expresses the unsuccessful appearance of the product on the market. To illustrate such a GCT, the Motorola Razer 2 cell phone mentioned above, which could not repeat the success of its predecessor, can be cited. The life cycle diagram of the product “failure” is shown in Figure 5.

Fig. 5: GC curve “failure”.

Renewal. This curve describes a product that was considered obsolete, but again became popular. An example is the resumption of demand for old models of machinery and furniture. The curve of such a life cycle is shown in Figure 6.

Fig. 6: GC curve “renewal”.

The scallop curve consists of a sequential series of cycles that are the result of the discovery of new characteristics of the product, new ways of using it. Nylon is a good example of such a gastrointestinal tract: this material is finding ever new uses (parachutes, stockings, underwear, carpets, etc.). Such a curve is shown in Figure 7.

Fig. 7: scallop curve.

A.V. Lukina in his marketing manual provides another way to classify varieties of the product life cycle, depending on the type of product. In total, she distinguishes 4 types of goods and, accordingly, 4 forms of LC curves: complex goods, simple goods, fashionable goods, fancy goods.

A complex product is a product that requires significant training from consumers and whose implementation phase is therefore stretched. This view, for example, has the life cycle curve of household computers, as consumers need to recognize the benefits of their purchase or learn to perform familiar tasks in a new way. The LC curve of a complex product is shown in Figure 8.

Fig. 8: LC 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 its acquisition. Such products can usually be easily copied by competitors, so the marketing strategy should be to quickly expand the distribution network. It is also important to have production facilities capable of satisfying the existing demand. One example of such a product can be crackers, which, having appeared relatively recently, are already issued under several trademarks. The LC curve of a simple product is shown in Figure 9.

Fig. 9: LC curve of a simple product.

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

Fad goods, such as car stickers in the form of blots or scratches, etc. - characterized by rapid take-off at the implementation stage and the same rapid decline. Unusual new features are usually inherent in such goods. The life cycle curve of a fad product is shown in Figure 10.

Fig. 10: Fancy goods sales curve.

However, in the opinion of the author of this course, at the present stage of development of scientific and technological revolution and the economy, such a division loses 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, in relation to the service market. Take at least nail extension. 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, many schoolgirls can brag. The same goes for complex and simple products. Take at least the author’s favorite topic (almost sore) mobile phones. In 2000, they clearly belonged to complex goods, after the purchase of which the consumer studied the instructions for a long time, sighed poked buttons, trying to understand what was what. Today, although cell phones have become many times more complicated and often surpass the personal computers of the 2000 model in their complexity and functionality, customers who make a purchase often do not even look at the instructions. And even five-year-old children can handle modern phones (a five-year-old son of a girlfriend serves as a vivid example of this for the author). You can give a reverse example. In the early 90s, the washing machine was a very simple product, each housewife with little or no training knew what to turn and where to press to wash the laundry. Today, a washing machine is a sophisticated computer technology that not every housewife understands (which is probably why they break so often in Russia, and not at all due to scale, as the advertisement claims).

3. BCG matrix

An effective assortment policy provides for the release of a wide range of products, which at the same time includes products in an optimal ratio that are different in the stages of the life cycle they go through, but which are simultaneously on the market. A wide assortment range of products strengthens the company's position in the market and expands sales. Moreover, it is very important to combine different products from the point of view of their profitability, since products of different stages of life cycle require different investments and bring different profits. The task of the enterprise is to form the optimal product range (portfolio) in which the investment 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 goods on the market (market position of the company) depending on the relative share belonging to it (the ratio of the share of goods of this company to the corresponding share of the main competitor) and the growth rate of market demand. This is the most popular scheme of portfolio analysis of a company’s business, which makes it possible to make important decisions in the field of the assortment policy of the company and choose its strategic business units. Any company would like to work in a growing market and offer products that capture its largest share.

The matrix has 4 sectors: high and low market growth with a large or small market share belonging to these products. In each sector there are products whose nickname is given in accordance with their current situation and prospects. Schematically, this matrix is \u200b\u200bpresented in Figure 11.

Fig. 11: BCG matrix.

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

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

"Dairy cows" - goods that are actively sold in the market and give large profits. Profits are much more than necessary to maintain the achieved market share. This financial surplus is directed to financial support for “difficult children” and “stars”. The position of goods in this sector is stable and corresponds to the maturity stage.

“Dogs” or “losers” are goods that are no longer in high demand and have no clear development prospects. They occupy the worst position: they do not bring profits, but I require funds to maintain their position. These products only pull on 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. In such a weak position are goods. Successfully passed the first three and ended up in a recession stage, or goods that the market did not accept at the implementation stage.

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

Conclusion

To write his term paper, the student chose the topic "Product Life Cycle in the Market: Development Phases, Types of Life Cycles". The concept of a gastrointestinal tract was first presented by Theodore Leviticus in 1965. The meaning of this concept comes 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 the product, its quality, market features, the life cycle of a particular type of product may vary over time. It can last from several days to several tens of years.

The researchers found that the demand for the goods does not change at all 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 identify 6 main varieties of gastrointestinal tract: “Boom”, “Passion”, “Failure”, “Renewal”, “Scallop line”, “Seasonality”.

An effective assortment policy provides for the release of a wide range of products, which at the same time includes products in an optimal ratio that are different in the stages of the life cycle they go through, but which are simultaneously on the market. The task of the enterprise is to form the optimal product range (portfolio) in which the investment 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 with a large or small market share belonging to these products. In each sector there are products whose nickname is given in accordance with their current situation and prospects. These groups of products are called “difficult children” (goods that are only entering the market and having a difficult position), “stars” (fast-growing goods that are leading in the market, generating significant income), “dairy cows” (goods that are actively sold on market and giving large profits) and "dogs" (goods that are no longer in high demand and do not have clear development prospects). 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, which are in high demand among customers. At the growth stage, the assortment of manufactured products is expanded and, by the maturity stage, a complete set of products of the entire parametric series (product line) is introduced to the market. In the recession stage, only one or two most popular models are left on the market.

List of references

1. Belousova S.N., Belousov A.G. Marketing: Study Guide. - 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: Study Guide. - M .: FORUM: INFRA-M, 2006;

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

6. Nozdreva RB, Tsygichko L.I. Marketing: How to win the market. - M .: Finance and statistics, 1991.

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

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

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

10. Theory of marketing / edited by M. Baker. - St. Petersburg: Peter, 2002.

annotation

To write his term paper, the student chose the topic "Product Life Cycle in the Market: Development Phases, Types of Life Cycles". The object of this study 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 the enterprise - manufacturer in all phases of product development to optimize sales and profits from its sale. The author sets his tasks:

The 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 methods for the most profitable sale of goods at all stages of its life cycle, and, consequently, increase profits from its sale.

... (often a modification of the first). Sales fall very quickly and only sells leftovers. The effect on the curve is a more gentle slope at the decline stage. 1.4. The use of types of advertising at various 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 ...

Support for the sale of goods will certainly decrease, and there will be an urgent need to force the promotion of a substitute product on the market, without additional technical verification and market tests, as a result of which it may fail. 2. Formation of the assortment policy of the enterprise 2.1 General characteristics of CJSC Ochakovo as a subject of marketing activities of CJSC OCHAKOVO - ...

Fig.2 : RCT "Passion" curve.

- The boom. This type of LCT describes a popular product with stable sales over time. The curve of such an LC is shown in Figure 3.

Fig.3 : Curve Varieties ZhTsT "Boom".

Fig. 4 : curve of the type of LC "Seasonality".

The “failure” curve describes a product that is generally unsuccessful in the market and expresses the unsuccessful appearance of the product on the market. The life cycle diagram of the product “failure” is shown in Figure 5.

Fig.5 : RCT curve "failure".

Fig.6 : GC curve "renewal".

Fig. 7 : scallop curve.

A.V. Lukina in his marketing manual provides another way to classify varieties of the product life cycle, depending on the type of product A. Lukina Marketing: Study Guide. - M.: FORUM: INFRA-M, 2006. P.128-129 .. In total, she identifies 4 types of goods and, accordingly, 4 forms of LC curves: complex goods, simple goods, fashion goods, fancy goods.

Complex goods - this is a product that requires significant training from consumers and whose implementation phase is therefore stretched. This view has, for example, the life cycle curve of household computers, as consumers need to recognize the benefits of their acquisition or learn to perform familiar tasks in a new way. The LC curve of a complex product is shown in Figure 8.

Fig. 8 : LC curve of a complex product.

Simple goods, on the contrary, it finds quick sales, because consumers easily master it and immediately realize the benefits of its acquisition. Such products can usually be easily copied by competitors, so the marketing strategy should be to quickly expand the distribution network. It is also important to have production facilities capable of satisfying the existing demand. One example of such a product can be crackers, which, having appeared relatively recently, are already issued under several trademarks. The LC curve of a simple product is shown in Figure 9.

Fig. 9 : LC curve of a simple product.

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

Fancy Goods, for example, stickers for cars, phones, laptops in the form of blots or scratches, etc. - characterized by rapid take-off at the implementation stage and the same rapid decline. Unusual new features are usually inherent in such goods. The life cycle curve of a fad product is shown in Figure 10.

Fig. 10 : fancy goods sales curve.

However, in my opinion, at the present stage of the development of scientific and technological revolution and the economy, such a division loses 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, take at least the theme 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, sighed poked buttons, trying to understand what was what. Today, although cell phones have become many times more complicated and often surpass the personal computers of the 2000 model in their complexity and functionality, customers who make a purchase often do not even look at the instructions. And even five-year-olds can handle modern phones.

The economic development of the product has a complex cyclical nature, as a result of which the problem of the nature, types, periodicity of cyclic fluctuations is important to identify the external causes of the crisis of specific products. The main goal of managing the life cycle of a particular product is to extend the period of its existence on the market.

LIFE CYCLE OF GOODS - a process consisting of successive stages of the emergence of an idea, development of a product, the foundation of its production, growth of market sales, moral aging, reduction and termination of production, replacement with a new, more progressive product. Almost all goods produced by people are forced to go through such a cycle at different times, and the concept of life-cycle technology is based on the fact that any product, no matter what exceptional properties it possesses, will sooner or later be squeezed out of the market by other, more advanced or cheaper ones.

When we talk about GCT, we mean the following:

1) the life of the product is limited;

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

3) at different stages of the 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, marketing and personnel management.

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

Fig. 8.2.1. Charts of sales volumes and accumulated profit

At the stage of product development, product samples are created that claim to be new on the basis of research, design, construction, technological development and testing. It is generally accepted that the process of creating a new product includes the formation of a plan, the selection of progressive ideas, the development of a plan and its pilot testing, the formation of a marketing strategy for a new product, the analysis of the possibilities of production and marketing of goods, design development, mass production, testing of the first lots 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 enters mass sales. At this stage, the manufacturer does not yet receive profit as a result of the continuing increase in the costs of the company, which was started by the development of the product, the costs are not yet paid off by sales revenues despite the increase in sales and the ability to sell new goods at a higher price in comparison with obsolete goods.

At the growth stage, if a new product meets the requirements of the market, the object of its sale begins to increase, the demand for the product increases. Due to the increase in sales, production becomes profitable, the mass of profit increases. Gradually, the initial costs of the manufacturer of the goods pay off at the expense of profit.

In the maturity phase, there is a slowdown in the growth rate of sales of goods and by the end of this stage it reaches zero due to saturation of demand and a decrease in buyers' interest in the goods with a simultaneous increase in sales revenue until it reaches its maximum and decreases. Most often, by this time, the producer of the goods manages to fully recoup the costs of the profit, but the additional profit is becoming less and less.

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

The causes of “aging” and “dying” of the product may 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, decline in purchasing power);

Technical progress;

Change in economic conditions.

In this case, the main task of the marketing service 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 must be performed by managers of the marketing service at various stages of the product life cycle can be illustrated in table. 8.2.1.

Table 8.2.1 The main characteristics of the stages of the product life cycle and typical marketing activities of the enterprise

	Product Lifecycle Stages
	Creation, development	Market launch	Growth	Maturity	Decline
	SPECIFICATIONS
Sales	Not available, dangerous sales possible	Weak	Fast growing	Slow-growing	Falling, search for new products
Profit	Is absent	Minimum or zero profit, losses	The largest	Stabilizes and begins to decline	Low or zero
Consumers	Not	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	Contracting
	MARKETING ACTIONS OF THE ENTERPRISE
Key Strategic Efforts	Search for a niche in the market	Market expansion	Market Approval	Defending your share of profit	Maintaining profit, reducing costs
Marketing costs	Growing	High	Tall but shrinking	Contracting	Low
R&D	Research and Design	Refinement of products	Improvement, modernization	Modernization	Substitution Search
Tovar distribution	Not	Uneven	Intense	Intense	Selective
Pricing	Trial	High	Average	Low	Lowest
Product	Design, prototypes	Main option	Improved	Differentiated	Selective

The concept of a life cycle can be applied to individual goods (trademarks), as well as to entire classes of goods. The life cycle of product classes is significantly higher than 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 idea of \u200b\u200bthe life cycle of goods plays a fundamental role in marketing, since different stages of the life cycle correspond to different marketing strategies and techniques, as a result of which the company's product strategy is constantly changing. Therefore, the product life cycle curve does not always have the same appearance. One common option is the “recycle” curve. The second "hump" of sales is caused by sales promotion measures carried out at the stage of product decline. Another variation is the “comb” curve), consisting of a sequential series of cycles generated by the discovery of new product characteristics, new ways of using it, and the emergence of new users.

Fig. 8.2.2. Varieties of LC curves

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

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

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

Fetishes are private manifestations of fashion that quickly gain general attention, are received with great enthusiasm, quickly reach the peak of popularity and very quickly go to the stage of decline.

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Maslova TD “Vozhuk ST., Kovalik L.N. Marketing. - St. Petersburg: Peter, 2008 .-- S. 180.

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

Klimin A.I. Marketing: lecture course. - M., 2005 .-- S. 45.

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

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

Maslova TD., Bozhuks S.G., Kovalik L.N. Marketing. - St. Petersburg: Peter, 2008 .-- S. 163-165.

The output of the tutorial:

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