Brand life extension technologies. Product life cycle, characteristics of its stages and ways to extend it. Methodology for calculating the original price

As you know, practically everything can act as a product: from an innovative invention to food products, from valuable information to the subject of art. But, whatever the product, it always goes through a certain life cycle. Just like any organism, the life of a product begins at birth. This is followed by "entering the people" (entering the market), then a period of active growth and maturity, after which the phase of saturation with the goods inevitably begins. And then the recession phase, which can easily end with "death" - that is, irreversible disappearance from the market. Naturally, each parent company seeks to prolong the active part of the life of its "offspring", and therefore the question arises: how to postpone the approach of the saturation phase? Or, if it has already arrived, how to revive the product and return the buyer's interest in it?

The duration of the life cycle as a whole and its individual phases depends on both the product itself and the specific market. It is believed that commodities have a longer life cycle, and finished goods have a shorter life cycle. In addition, the life cycle of the same product in different markets can be different. There are several ways to extend the "life of a product", the effectiveness of each of which depends on a number of factors that somehow affect a particular product.

Product modification / improvement

You shouldn't "reinvent the wheel", you just need to add a new part or function to it. At the same time, the innovation should be competitive, or better - unique in the market for similar goods. For example, not so long ago, National Semiconductor, hoping for a resurgence of interest in Internet set-top boxes, released a concept product that combines the functions of eight devices at once in one portable set-top box "weighing less than a pound." Origami - this is the name of the new product - can be turned into a video camera, videophone, Web-tablet, terminal Email etc.

New design

A design change is not just a superficial change to a product, as it might seem at first glance. When a consumer is satiated with high technical performance (and in most cases, leading companies keep up with each other in the speed of introduction of new technologies), before making his choice, he begins to pay closer attention to appearance goods. Let's remember the lineup mobile phones Nokia. Naturally, they differ in technical and functional characteristics, however, today great importance Nokia lends design. The advertisements for the latest series of mobile phones exploit the attractive appearance of mini phones in many ways. It is the design, and not the capabilities of the phone itself, the analogs of which can be found in other brands, that distinguish Nokia from other manufacturers.

New packaging

New packaging with the same contents is a great reason to remember quality and, at the same time, keep pace with progress. The well-known Mentos dragees in a classic package are a cylindrical pack and a round candy shape, Mentos in a new package is a cube-shaped dragee, blue(which was not available before in any Mentos variety), and the pack itself is made in the form of a box with a "long-playing" lid. Ditto with the new Orbit wide gum pack. Come up completely new type chewing gum is perhaps impossible, while changing a pack is a simple matter.

Support for a large-scale action

It may well return the lost interest in the brand and sponsorship any interesting mass action. For example, the Swiss pharmaceutical concern Bayer in 1990 and 1991 sponsored the Kremlin Cup, a tennis championship. The Coca-Cola Company was the general sponsor of the fourth Assembly "Restaurant World Expo-2001" (this, of course, is not the only sponsor project of Coca-Cola Refreshments), and the general sponsor of the X-Games in Volen Park was "Klinskoe Pivo".

Organization of your own event

Organizing your own event is a great way to remind yourself and your opportunities. An example of this is the show of world gymnastics stars "Galina Blanca-2001" or, for example, the show-race in Krylatskoye with the participation of the strongest skiers of the planet "Miracle Yogurt - Ski Sprint" Nescafe is hosting the "Nescafe - Clean Energy" Extreme Sports Festival.

Extreme situations

Oddly enough, extreme situations can also be useful for extending the life of a particular product / service. Such situations include shortages, economic crises, food shortages, environmental problems... For example, during the next economic decline in our country, the network mobile communications"SONET" has released its famous tariff "Anti-crisis" (unlimited for $ 25 per month), thereby significantly increasing the number of subscribers.

New service

The new service may turn out to be a significant accompaniment to an existing service complex. Suppose a company engaged in restaurant business, introduces the so-called happy hour. It is usually held 1-2 times a week. A visitor can take two glasses of beer for a certain time (2-3 hours) for one price, or the restaurant will offer drinks corresponding to the meal for free with certain dishes. This new service will surely attract more visitors.

Another example is a new version of the service. Mobile subscribers are given the opportunity to order food at 6 thousand restaurants of the Food.com Internet network at home. Users of the created Motorola-Food.com system can naturally place an order from a Motorola mobile phone, indicating their preferences, delivery address and payment method.

Also an option for reminding yourself. Any, even the most successful slogans and commercials over time "get bored" and begin to cause irritation, so they need to be changed even for those companies whose products have not yet entered the recession phase.

A prime example is the evolution of Snickers slogans. Popular chocolate has long been associated with the slogan "Ate - and order!" and the latest find of advertisers "Stop the nut madness!". Accordingly, when the slogan is changed, both the television and the radio clip change, and with them - and outdoor advertising and everything else.

This is an extended version of the previous paragraph, when not just a slogan or a video is changed, but the entire advertising campaign as a whole is transferred to another advertising agency or is restarted.

Release of a new product under the same brand

It's really good way more carefully approach the question of consumer tastes and expand the range of their products. Let us recall the giant company Wrigley "s - the leading manufacturer of chewing gum. Initially, the company had only three varieties of its products - this is the well-known classic trio of" arrows. " original taste. With the expectation of mastering a new target audience, Wrigley "s, gradually putting on the market one by one different grades of chewing gum, also produces children's Orbit. And this Wrigley" s, apparently, did not seem enough, and soon chewing gums of "medicinal properties" appeared on the shelves. - Airwaves. At the same time, the classics of the genre - doublemint, spearmint and jucy fruit, still remain "on horseback".

Regulation of pricing policy

Regulation of pricing policy can be carried out both in the direction of decreasing prices, and in the direction of increasing. Accordingly, by setting certain prices, the company "develops new frontiers", expanding its target audience... The fast food restaurant chain - McDonald's - regularly changes its pricing policy: either by releasing new varieties of sandwiches at an affordable price for all segments of the population, or by lowering prices for existing products.

Numerous McDonalds promotions are also indicative. For example, the sale of two sandwiches for the price of one, a reduction in the price of the best-selling sandwich - Big Mac, as well as the introduction of numerous new products, such as: country-style potatoes (as an alternative to french fries), "Italian weeks" - two new sandwich with Italian cheese "Mozzarella", "Taste of the season" - cocktails or pies sold at McDonalds exclusively in this season and other marketing solutions.

The duration of the life cycle and individual phases depend both on the product itself and on a specific market. It is believed that commodities have a longer life cycle, and finished goods have a shorter life cycle. In addition, the life cycle of the same product for different markets may be different. Despite the fact that the life cycle of a product is an objective reality, the marketing action of the company can have a force on it. The main purpose of life cycle management a specific product- to extend the period of its existence on the market. The originality of the situation at different stages of the life cycle determines the marketing actions used: the creation of innovative products, the creation of modifications of the product to extend its life cycle, the removal of the product from production.

There are several methods of extending the life of a product, the effectiveness of each of which depends on a number of factors, either on the contrary, affecting certain products.

Market modification. Within the boundaries of creating a market modification, a search for new users of the product is carried out. New users can represent the newest section of buyers, not covered by the firm in the decrepit geographic market, in this case, the metamorphosis of the positioning of the product in such a way that it would be attractive for the new segment is acceptable, can focus only on large or rapidly growing sections of the market.

A firm can increase its offer by entering new geographic markets, and then a metamorphosis is required.

Creation of a modified product. Any modification is the process of a manufacturer modifying the characteristics of its present product in order to extend its life cycle.

Modification can be created using 2 techniques. The first method leads to a change in the presentation of a product on the market (creation of variations), the second method leads to the creation of several options for the presentation of a product at a time (creation of differentiation).

Creation of innovative products. At the current time, a decrease in the average duration of the product's life cycle is being monitored, therefore, manufacturers are obliged to spend significant funds on the creation of new products. It is difficult to come up with something perfect in everything, and as practice shows, this is certainly required by buyers. The novelty of the product can be viewed from different points of view.

The tendency to shorten the life cycle is due to the influence of scientific and technological progress, which allows competitors to produce more ideal goods.

Variation is a technique for modifying a product, in which a new version of a product is offered to the market instead of an existing old one.

A variation is applied by the manufacturer in cases where:

There are no satisfied sources for the implementation of two options for offering a product at the same time;

The old version has completely exhausted all the possibilities in the market;

Changes in the product are not so significant so that the comparison of options would be advantageous for the manufacturer;

The most important variant of the product can displace the old product, because it is better adapted to the decision of the stub of buyers.

Differentiation is the method of modifying a product, in which the market is offered the newest version of the product at the same time as the old one, thereby achieving a greater variety of product offerings.

If there are no reasons for prompting the manufacturer to resort to variation, then the firm differentiates the offer of their product on the market, because this technique allows you to increase the composition of the market and create a wide and large selection.

Modification of the marketing mix. Modification of the marketing mix assumes the metamorphosis of one or several of its elements in order to attract the attention of new buyers and increase the commitment of those who have previously tried out the product. To attract new customers, it is permissible to reduce the price or conduct a sales promotion campaign. It is permissible to try to develop a better acting advertising company and measure the image of the product. The firm can use other market channels or offer customers additional services.

Modification of a product implies a change in the existing characteristics of a product, such as design, taste, quality or properties in order to attract new customers.

Quality improvement is useful when the following data is met:

The quality of the product lends itself to improvement;

Customers trust claims for quality improvement;

Quite a large number of customers want product improvement.

Improving the properties of a product allows you to monitor its functioning more faithless, more comfortable. Changes in the external design give the product an attractiveness and modernity.

Often it is the design of the product that determines the relevance of the product to modern times, while the functional properties remain unshakable for a long time.

Removal of goods from production. The drop in sales of the product at the last stage of the product's life cycle is a signal for the manufacturer to resolve issues of subsequent production of the product. As usual, the decision to discontinue production affects other components. marketing activities manufacturer. In particular, the characteristics of the choice, the relationship with the customers, the relationship with the internal contacts of the audience are changing. Hence a decision can only be made on the basis of a thorough review. Removing a product from production is a set of marketing measures to remove a product from the market, one that assumes the discontinuous release of finished products, the reorientation of still existing buyers to other products of the company, ensuring the obligations assumed by the company for service goods still in operation. The decision to exclude a product from the nomenclature can be implemented in two forms: either it will be sold to another company, or its production will be interrupted. In the latter case, the firm performs all the activities for servicing the remaining customers independently.

The life cycle of a product characterizes specific patterns of development of the turnover and profit of a firm in a specific market over time, that is, the dynamics of the behavior of a competitive product in the market. The life cycle of a product in this case acts as an ideal model of the market's reaction to the company's product offer. The life cycle model illustrates that any commodity as a product of labor has a limitation on the period of life expectancy, during which it goes through several stages: development, implementation, growth, saturation and decline.

Product life cycle - the period during which the product finds its customers. The period of physical existence does not always coincide with the life cycle. The life cycle of an individual product is characterized by the period of product sales - from the first customer to the last. For each product, it is individual and in the age of scientific and technological progress is rather limited. However, for most products, the firm seeks to extend its life cycle, while using the marketing typology and the specific characteristics of the product and market.

The International Organization for Standardization identifies eleven stages of the product life cycle (LCT):

marketing, search and market research;

development technical requirements, product development;

material and technical supply;

preparation and development of production (i.e. technological) processes;

production;

control, testing and inspection;

packaging and storage;

sales of products;

installation and operation;

technical assistance and service;

disposal after service.

At the first stages of creating a lifecycle, a marketer needs to decide for whom the product is intended, for which market segments it is intended, what is the number of possible consumers and what their needs, both group and personal, are. However, in the future it is very important to know? what is for of this product typology of marketing. At the same time, it is important to know that marketing is present at certain stages of the life cycle cycle, albeit in an implicit form. So, stage 2 ends with the creation prototype... Naturally, it needs to be assessed from the perspective of the consumer, and also, possibly, to start an advertising campaign. At the 3rd stage, suppliers of raw materials and components are determined, the cost price and consumer properties of the goods depend on them. Stage 4, at which all technological operations and their sequence in the manufacture of goods are determined, the cost price and consumer properties of the goods are finally formed. The quality of workmanship at the production stage (5th) determines the attractiveness of the product for the consumer. Stage 6 is aimed at eliminating possible defects and taking into account the interests of the consumer as much as possible.

In this case, all elements of the product are important. In particular, demand depends on packaging, packaging is one of the types of advertising - a "dumb seller", and therefore marketing at stage 7 is necessary. Sales of products (8th stage), i.e. the conclusion of contracts for the supply and direct movement of goods from producer to consumer is impossible without studying and attracting consumers to their side, i.e. no marketing. Installation and operation (9th stage), technical assistance and maintenance (10th stage) must be carried out in the most convenient and timely manner in relation to consumers, otherwise they will go to our competitors. This also applies to disposal (11th stage) after service.

The duration of the life cycle (LC) of the product depends on:

the technical complexity of the product: the more complex the product, the more life cycle;

the volume of investments in the development of goods and sales and marketing networks;

the presence of competitors: the more of them, the more aggressive their policy on the market, the shorter the life cycle of the product;

quality marketing research and the degree to which they correspond to the interests of certain groups of buyers.

The transition from stage to stage occurs without abrupt jumps. Therefore, it is necessary to closely monitor changes in the rate of sale in order to capture the boundaries and accordingly amend the marketing program. It is especially important to capture the stage of maturity and even more - the decline. Keeping a “sick product” on the market is extremely unprofitable, and in a prestigious sense it is simply harmful.

The shape of the life cycle curve, the duration of its stages most often depends on the most characteristic consumer properties of the product, in particular, on its technical complexity, the volume of new properties that distinguish it favorably from similar products, the degree of compliance with consumer demands, the number of substitute products and their competitiveness. , the level of production costs. The second important factor is the state of the market and the nature of competition in it.

In addition to the classical shape of the product life cycle curve, when the stages of product introduction into the market, growth, maturity and decline are clearly defined, examples of its specific modifications can be distinguished. The boom curve describes an extremely popular product with stable sales for a long time. Continuous craze suggests a rapid rise in product sales, then a rapid decline, but with residual average sales. The seasonal curve, or fashion curve, refers to the life cycle of products that experience periodic, spaced-apart ups and downs in demand in the marketplace. The failure curve usually reveals the behavior of a product that has no market success at all.

In relation to such goods, it is customary to distinguish two main stages: a sharp increase in sales in the first stage and an equally sharp decline in the second. This is due to the fact that the "peak" of fashion usually lasts a long time and ends suddenly. Demand drops just as suddenly. It is no coincidence that the introduction of highly fashionable products to the market entails a great commercial risk, and their prices at the first stage are very high so that you can recoup the costs and, to some extent, compensate for the drop in profits at the second stage.

A number of products are characterized by an extended life cycle (renewal curve or nostalgia). In this case, the constant growth of demand is interrupted for a short time by stabilization with a decline, after which its next increase is observed again. The reasons for extending the life cycle can be different: new areas of product application, new market segments, price reductions, etc.

The transition from one phase of the cycle to another usually occurs smoothly, without jumps. Because of this, the marketing department must closely monitor the dynamics of sales and profits in order to catch the boundaries of the phases and, therefore, make changes to the marketing program, redistribute marketing efforts, and adjust the structure of the marketing mix. It is especially important to catch the stage of saturation and, even more so, of recession, since it is unprofitable to keep a “sick product” on the market.

In addition, we also note the following important points.

The duration of the life cycle A as a whole and its individual phases depends both on the product itself and on the specific market. Generally speaking, commodities have a longer life cycle, finished goods have a shorter life cycle, and the most technically advanced goods have a very short life cycle (2-3 years).

The life cycle of the same product, but in different markets, is not the same. In the Russian undemanding market, it is much longer than, for example, in the USA, Japan, Germany with their developed competitive market.

With the help of marketing tools, the life cycle in the target market can be either extended or reduced.

Marketing Rozova Natalia Konstantinovna

Question 42 Concept of the product life cycle (LCT)

Answer

The concept of the life cycle of a product was proposed by T. Levitt in 1965. The concept of a life cycle describes the behavior of a product from the moment of its initial appearance on the market until the complete cessation of sale in this market.

The Life Cycle Concept applies to:

The type of product (for example, a personal computer);

Type of product (for example, laptop);

Brands (for example, a laptop of the company Acer).

Graphically, the LCI can be represented by a curve that expresses the dependence of the volume of sales of goods on time (Fig. 50). Life cycle contains several stages, in the classical case - four:

Implementation (market entry);

Maturity;

Rice. fifty. Classic Life Cycle Curve

Go-to-Market Marketing Challenges:

Formation of an adequate sales network;

Active informing potential consumers about the merits of the new product;

Development of options for possible behavior of competitors in response to the appearance of a new product on the market;

Ensuring the adaptation of a new product on the market, etc.

Marketing challenges at the growth stage:

Setting an optimally high price;

Creation of a wide distribution network for the mass sale of goods, etc.

Maturity Marketing Tasks:

Retention of consumers;

Market share protection through product and price differentiation;

Finding ways to prolong life cycle.

The main characteristics of the classical life cycle are given in table. 31.

Table 31Characteristics of the life cycle

Many scientists are of the opinion that it is necessary to include and product development stage, which has a latent character from the point of view of the market. At this stage, the need is studied and the characteristics of the market are assessed.

The duration of the stages of the cycle and their ratio is not the same for different goods: the stages can last for several days, weeks, years, and even centuries. The forms of the life cycle curve also differ, which are determined not only by the nature of the product, but also by the dynamics of the market. Examples of life cycle curves are shown in Fig. 51–55.

Rice. 51."Fashion"

Rice. 52."Continuous hobby"

Rice. 53."Market failure"

Rice. 54."Seasonality"

Rice. 55."Comb Curve"

The concept of life cycle cycle serves to improve the efficiency of the manufacturing enterprise. To do this, it is necessary to supervise the product throughout the entire life cycle, taking into account the problems and opportunities specific to each stage.

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