Term Paper on "Life Cycle of a Product"

Term Paper 4 pages (1425 words) Sources: 4 Style: APA

[EXCERPT] . . . .

Product Lifecycle of a Personal Computer

Product Lifecycle Influences on the Marketing Mix of Personal Computers

The requirements of each phase of a product lifecycle for a personal computer from a marketing mix perspective vary significantly, and are analyzed and explained in this paper. The phases of product life cycle include the product introduction, early growth, late growth, maturity and decline or harvesting. While there are many definitions of the product life cycle concept, the five phases defined here are commonly considered the most prevalent and applicable across industries. The PC industry is known for rapid product lifecycles due to speed of technological innovation of microprocessors (Deltas, Zacharias 2006). The influence of key components on increasing the velocity of product lifecycles has also been thoroughly evaluated, showing the speed of underlying technologies having a direct impact on the brevity of PC product lifecycles (Bayus 1998). The implications on how the components of the marketing mix need to be balanced and aligned with the specific needs of each stage of the product lifecycle create a formidable challenge for every PC manufacturer. Hewlett-Packard has created a methodology to assist their product management teams in aligning marketing mix strategies to each stage of the HP PC product life cycles (Burruss, Kuettner 2002). This paper will describe how PC manufacturers align the components of their marketing mix to the specific stages or phases of the product life cycle.

Marketing Mix Implications by Phase of the Product Lifecycle

Creating awareness for a new product, attracting entirely new prospects and customers, often defining entirely new distribution channels, all predicated on either an entirely new product or product line extensions to further an existing products' life, the Introduction phase of the product lifecycle is often the most expensive for companies to complete. Product introductions or product launches require synchronization across product, price, promotion, and distribution strategies, all executed to a specific launch date or as it is called in some PC companies, first customer ship (FCS). Leading up to the Introduction Phase of the product life cycle there are often entire series of cross-functional meetings that coordinate engineering, supply chain, services, production, quality management, sales and marketing efforts to ensure that the launch strategies are as effective as possible in attaining the Introduction phase objectives. In Toshiba's Computer Products Division the cross-functional teams include development groups in Japan and a large Marketing organization in Irvine, CA. Looking to optimize the marketing mix for major product introductions, Toshiba consistently relied on product-related messaging over and above any other. Sony on the other hand, created a marketing mix-based strategy during the introductions of their laptops that concentrated on transitioning from product-oriented to services and operations concentration with relative fluidity throughout the duration of the product life cycle (Rao, Perkins 2004). The key take-away from evaluating how PC manufacturers manage their marketing mixes during the Introduction phase is the concentration on synchronization across departments and functional areas to ensure a coordinated product launch. Depending on the broader or longer-term strategic objectives that a given PC manufacturer may have, a given product introduction may focus more on distribution strategy over innovative product messaging. Overall however the Introduction phase of the product lifecycle concentrates on all four areas of the marketing mix with equal intensity to ensure an effective product introduction.

The early growth phase of the product lifecycle for PC manufacturers is where distribution channels are grown quickly based on the technological differentiation of the systems being offered, in addition to experimentation with bundling to drive sales volume. In addition, this phase of the product lifecycle is also where allocation of very popular PCs and laptops are used as incentives to top distributors in exchange for gaining shelf space and access to their dealers and distributors. For many PC manufacturers this growth stage can last anywhere from three to nine months depending on the depth of innovative differentiation in the company's systems and laptops. In the case of HP, Dell, Sony and other PC manufacturers with a global distribution strategy often use this phase of their product lifecycles to capitalize on the uniqueness and highly differentiated value of their systems to gain channel dominance (Gabrielsson, Kirpalani, and Luostarinen 2002).

The late growth phase of the product lifecycle for PC manufacturers is marked by… READ MORE

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