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Product Lifecycles & Adoption Curve. Presented by Bob Perry. The Entrepreneur . One who: organizes, manages, and assumes the risks of a business or enterprise Risk Takers…Market Finders. The Marketing Mix. Product. Price. C Customers. Place. Promo. Product.

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Presentation Transcript
the entrepreneur
The Entrepreneur
  • One who:
    • organizes,
    • manages, and
    • assumes the risks of a business or enterprise
  • Risk Takers…Market Finders
the marketing mix
The Marketing Mix

Product

Price

C

Customers

Place

Promo

product
Product

The needs satisfying agent that is offered.

  • Convenience Goods
    • Staples
    • Impulse
    • Emergency
  • Shopping Goods
    • Homogeneous Goods
    • Heterogeneous Goods
    • Specialty Goods
product life cycle
Product Life Cycle
  • Products (like customers) have a life cycle. Sometimes these life cycles can be short, but often the life cycle of a product can be longer.
  • Generally, a product will go through four stages during its life cycle:
    • Introduction/Development (Birth)
    • Growth
    • Maturity
    • Decline (Death)
product life cycle1
Product Life Cycle

Maturity

Development &

Introduction

Growth

Decline

Sales / Profits

introduction stage typical characteristics
Introduction StageTypical Characteristics
  • Sales grow slowly
  • Few if any established customers
  • Frequent product modification
  • Skimming price strategy
  • High failure rate
  • Profit minimal to negative
  • Limited product models
  • Little competition
  • High Promotional Cost
  • Focus is on creating awareness of product
  • Promotion strategies need to create demand
  • Intensive personal selling to distribution channel common
growth stage typical characteristics
Growth StageTypical Characteristics
  • Sales grow at an increasing rate
  • More customers are established
  • Profits increase as sales increase with more limited competition
  • Prices start falling as competitors are added
  • Large companies may acquire smaller, pioneering firms
  • Heavier brand advertising and focus on differentiation between brands
  • Economies of scale start to influence pricing
maturity stage typical characteristics
Maturity StageTypical Characteristics
  • Sales continue to increase as the market place grows with adapters
  • Profit margins begin to shrink as more competitors enter market place
  • Product lines are widened or extended
  • Emphasis on product style more than just function
  • Marginal competitors begin to drop out of marketplace
  • Heavy promotion to maintain market share
  • Maturity stage can last for an extended period of time.
decline stage typical characteristics
Decline StageTypical Characteristics
  • Sales decline or disappear
  • Sometimes new products with more utility replace older products
  • Falling demand forces many and eventually most competitors out of the marketplace
  • Some specialty firms may stay in the market for a long time as competition leaves the marketplace.
  • Sales are generally low and the only way to survive is to find niches for the product that can support higher pricing
adoption curve
Adoption Curve
  • The Adoption Curve is adapted from a Everett Rogers Diffusion of Innovations and is used to show how quickly differing consumer groups adopt new products
  • The Adoption Curve segments include:
    • Innovators (3% to 5%)
    • Early Adopters (10% to 15%)
    • Early Majority (about 34%)
    • Late Majority (about 34%)
    • Laggards (5% to 16%)
innovators
Innovators
  • Do not rely on norms or past standards
  • First to adopt any new product, service, or idea.
  • Tend to be younger with higher social or economic status
  • Rely less on group norms and like to get their information from technical sources and experts.
  • Generally 3% to 5% of the population
early adopters
Early Adopters
  • Relatively high is social status and often opinion leaders.
  • Typically younger, more mobile, and more creative than majority
  • Rely on input from innovators and technical sales
early majority
Early Majority
  • Early Majority consumers collect more information about the product and will weigh the pros and cons before they make a decision.
  • They listen to their opinion leaders and will rely on their groups’ opinions instead of forming them for themselves.
  • Early Majority group members are positioned between the earlier and later adopters and are deliberate in their data collection process.
late majority
Late Majority
  • Late Majority consumers adopt a new product mainly because their friends have all adopted them and they feel the need to conform.
  • This group is typically older and may have below average income and social status.
  • They listen to word-of-mouth communication over mass media, since they trust their friends more.
laggards
Laggards
  • Laggards do not rely on group norms and values, just like Innovators, which makes them difficult to reach.
  • Their past heavily influences their current decision process. 
  • By the time Laggards adopt an innovation it has been possibly outmoded and replaced by something new and flashy.
  • They are extremely suspicious and feel alienated from a rapidly changing society.
  • This group probably bought their first black-and-white TV after color television was already dominantly used.
  • Marketers and advertisers tend to ignore Laggards since they are not motivated by advertising or personal selling and will only purchase a new product when they absolutely have to.
adoption curve1
Adoption Curve

Laggards

Innovators

Early Adopters

Early Majority

Late Majority

90%

Percent of adoption

50%

20%

5%

Time

product life cycle2
Product Life Cycle

Maturity

Development &

Introduction

Growth

Decline

Moccasins

Tablets

Shoes

Crocs

MS Windows

Oculus Rift

Microsoft Surface Pro

Atari

Cassette players

VCR Players

Vinyl Records