Managing the Double Bottom Line by dawansv

Managing the Double Bottom Line

PRODUCT LIFE CYCLE Rationale: The product’s life cycle is the process through which a product enters, grows, saturates, and leaves the market. During the life span of your product or service, you will reformulate your marketing strategy several times—not only as a result of changes in market conditions or new competitors but also in response to changes in customers’ interest and requirements for the product. The four stages of a product’s life cycle are introduction, growth, maturity, and decline. Each stage is marked by specific characteristics. Stages of a Product Life Cycle

4Introduction—when new-product sales are slow, and profits are nonexistent,

market becomes saturated and price competition can be fierce. Marketing efforts at this stage concentrate on targeting a new market of buyers and taking market share from competitors by price cutting or relaunching the product. When you see a product advertised as having a “new” or “improved formula” or as “now recyclable,” that is usually a good indication of a mature product after a face-lift.

4Decline—indicated by falling sales and often rapid and eroding profits. At this stage an enterprise must decide whether it wants to try to rejuvenate the product by investing in development and aggressive marketing or to quietly admit defeat and exit the market. For example, in the advent of electricity, gas lamp producers either integrated the new technology into their products or went out of business.

A Business Planning Reference Guide for Social Enterprises

The Marketing Plan

4Maturity—marked by flattening sales and stabilizing, then decreasing, profits. The

Chapter 5

because of heavy costs of production and promotion. Often during this stage there are few competitors, promotion is heavy, and the focus is on getting potential customers Product Life Cycles to try the product rather than 4 Products have a distinct beginning and an end. on the developing the brand. 4 Profits increase, level off, and then decline, depending 4Growth—a period of rapid on the stage in the product's life. market acceptance of the prod4 There are marketing and sales challenges at each uct and dramatic increase in stage in the product’s life. sales and profit. After a product 4 Managers must make strategic decisions based on takes off, copycat competitors where a product is in its life cycle. enter the market. During the growth stage marketing shifts to creating brand preferences, and promotion lessens.

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