Professional Documents
Culture Documents
Digital cameras
Mini-disc
Electric cars
DVD
VR*
Introduction
•The seller tries to stimulate demand
•Promotion campaigns to get increase public awareness
•Explain how the product is used,
•You will lose money, but you expect to make profits in the future
Stages in the Product Life Cycle
Introduction
•Sales are low, and profits are below the line because your costs are greater than the
amount of money you make
•you have “negative” profit
•Need to spend a lot of money on promotion
Stages in the Product Life Cycle
Growth
A lot is sold - The seller tries to sell as much as possible
Other competitor companies watch, and decide about joining in with a competitor
product
“success breeds imitation” (Text)
Growth will continue until too many competitors in the market - and the market is
saturated
Stages in the Product Life Cycle
Growth
•At the end of the growth stage, profits start to decline when competition means you
have to spend more money on promotion to keep sales going.
•Spending money on promotion cuts into your profit
Stages in the Product Life Cycle
Maturity
Many competitors have joined - the market is saturated
The only way to sell is to begin to lower the price - and profits decrease
It is difficult to tell the different between products since most have the same F.A.B. -
Features, Advantages & Benefits
Competition can get “Nasty” and commercials are intense
Stages in the Product Life Cycle
Maturity
“Persuasive Promotion” becomes more important during this stage
That is to say, you have commercials almost begging the customer to still buy your
product because you still make it just as good.
Stages in the Product Life Cycle
Decline
Newer products are now more attractive - even a low low price does not make
consumers want to buy.
Profit margin declines - and so the only way to make money is to sell a high volume
Stages in the Product Life Cycle
Decline
To increase volume you try to
1. Increase the number of customers - get new customers
2. Increase the amount each customer uses
Mergers and Industry Life Cycle
Introduction stage
ITC
The BCG Matrix for ITC Ltd.
Stars ?
•Hotels •FMCG- Others
•Paperboards/
Packaging.
•Agri business.
Cows Dogs
•FMCG-Cigarettes •Maybe ITC
Infotech.
What is SWOT Analysis?
SWOT Analysis is an important planning tool that
helps a Person or an Institution identify, in a
systematic and organized way, its internal
strengths/weakness
Helps it match these strengths/weaknesses with
the opportunities or threats in the environment.
CATEGORIES OF STRENGTHS
Financial
Marketing
Expertise
Personal Capabilities and Commitments
Resources / Production methods
Human Resource management
Identifying Resource Weaknesses
and Competitive Deficiencies
A weakness is something a firm lacks, does poorly, or a
condition placing it at a disadvantage
lack of resources
Lack of technical know
Lack of strategies and so on
CATEGORIES OF OPPORTUNITIES
• Competitors
• Industry Trends
• Consumer Trends
• Economic
• Government
• Environmental
• Technology
Porter’s Five Forces
Threat of New Entrants
Economies of Scale
Switching Costs
Government Policy
Bargaining Power of Suppliers
Suppliers are likely to be powerful if:
Example: