MKT 421 week 3
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MKT421Week3TheProductLifeCycleFitbit1.pptxMapping the Product Life Cycle (PLC)
MKT/421
Table of Contents
Production Life Cycle
Importance / Benefits
Pricing Strategy
Intro to Fitbit
Fitbit – about
Production Life Cycle
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
PLC – Importance / Implications
References
2
product life cycle
“Describes the stages that a new product goes through in the market place” (Kerin, Hartley, and Rudelius, 2015, pp. 292)
Stages
Introduction
Growth
Maturity
Decline
Speaker Notes:
Just like people, animals, and plants products have a life cycle. Each new stage of the product life cycle has a different competition, product, price, and promotion strategy. The four stages are listed here introduction, growth, maturity, and decline. Each stage will be further discussed throughout this presentation.
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product life cycle – Importance / Benefits
Extended lifetime
Reduced time to market & reduced costs
More efficient, profitable & higher return on investment
orderly & profitable end of life
Speaker Notes:
The major benefit / importance to a well-thought-out product of life cycle is the extended lifetime of the product, by planning the life cycle you can significantly extend your time in the market does receiving a significant increase in profit. According to Karagh Fox (2013) some other benefits include a reduced time to get into the marketplace while enjoying reduced market entry cost, a more efficient profitable and higher return on your investment, and an orderly and profitable end of life for the product.
4
pricing strategy
Speaker Notes:
Some of the factors marketing managers should keep in mind when developing a pricing strategy are to reflect on what value your product provides versus your competitors. Marketing managers should also keep in mind to match what the market will actually pay for your product setting the price too high and you risk losing customers while setting the price too low makes you loose profit. Marketing manager need to be sure that the price supports your brand. The correct pricing strategy should also enable you to reach your revenue and market share goals while maximizing your profits (Marketing Guides, n.d.).
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Reflect
Reflect the value you provide versus your competitors
Match
Match what the market will truly pay for your offering
Support
Support your brand
Enable
Enable you to reach your revenue and market share goals
Maximize
Maximize your profits
Speaker Notes:
“When it comes to reaching your fitness goals steps are just the beginning! ” -Fitbit
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FitBit
Head quarters – San Francisco CA
Established in 2007
Wireless activity tracker – Bluetooth
Grown into a community
Measures
Number of steps
Floors climbed
Heart rate
Sleep quality
Calorie intake and output
Water intake
Workout days – time
Badges accomplished
ect
Speaker Notes:
Fitbit headquarters are in San Francisco California they were first established in 2007. It is a wireless activity tracker that uses Bluetooth to communicate which can be used with mobile app, and Windows 10 mobile. All this is, is just an activity tracker a high-tech pedometer it has grown into a community with sister's apps that work with Fitbit, and multiple different devices. Depending on which device is being used Fitbit can measure the number of steps, activity minutes calorie intake and output and much more. Listed on the slide I have some of the different measurements that can be taken through the Fitbit.
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Introduction Stage
Price strategy
High or low
Product
Single version
Competition
Minimal
Profit
Minimal
Product is introduced to the marketplace
Marketing objective
Create customer awareness
Money spent on advertising and promoting
Speaker Notes:
The introduction stage of the production life cycle is when the product is introduced to the marketplace. The main marketing objectives are to create customer awareness about the product. To do this the company spends a great deal of money on advertising and promoting the product. The price strategy can be either high or low depending on how much excitement there is in the marketplace for the new product. There's usually only a single version released at this time, and it can be difficult in gaining distribution for unknown products. The introduction phase has minimal competition with minimal profit gained for company.
Fitbit
The introduction stage for Fitbit was a slow stage. It took the company almost two years to receive any positive reaction. In this time Fitbit almost closed on several different occasions. Fitbit’s introduction stage last almost 4 years.
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Growth Stage
Price strategy
Aggressive
Product
Different variations
Sales increase
Repeat customers
New customers
Growing distribution
Marketing objective
Brand recognition
Competition
Grows rapidly
Profit
Peaks
Speaker Notes:
The growth stage is where sales increase due to new customers and repeat customers. In this stage is important for companies to gain distribution, this is an easier task if the product is popular. Marketing focuses on brand recognition to fight against growing competitors, also new versions of the original product tend to be produced more frequently in this stage. Adding new and improved versions helps differentiate between companies and brand names. In the growth stage price strategies attend to be aggressive dealing with the new competitors that are rapidly growing producing their own versions of the original product. This allows the stage to be the most profitable.
Fitbit
The growth stage for Fitbit started at the end of 2011 and has continued on throughout the years. In 2015 Fitbit owned 77% of the market share competing with Nike as their biggest competitor . Fitbit has launched multiple different products to increase brand recognition. Also to increase brand recognition in February of 2015 Fitbit started a campaign for fitforfood, which ended up donating 1.5 million meals for Feeding America well increasing brand recognition (Hum, 2015). In this stage Fitbit has grown into a community more than just a product that can count steps. Some different competitors to Fitbit is Pebble which started in July 2013 and shut down in December 2016 Fitbit bought the intellectual property in 2016. A few other competitors that Fitbit has gained is as previously mentioned Nike, Garmin, Jawbone, Adidas, Microsoft band, and Samsung Galaxy Gear Fit.
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Maturity Stage
Price strategy
Constant
Product
Few new variations
Competition
Decrease
Profit
Decline
Sales decreasing
Marketing objective
New buyers
New uses
Speaker Notes:
In the maturity stage sales tend to decrease. The new marketing objectives are to find new buyers and new uses for the product. The product has fewer new variations and some of the lets known name competitors tend to leave the market while the profit has started to decrease.
Fitbit
Has not entered into this stage yet.
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Decline Stage
Price strategy
Drops
Product
No new versions
Competition
unchanged
Profit
Minimal
Sales drop
Possible reason – environmental changes
Two options
Deletion
Discontinuing the product
Harvesting
Continues to be offered
Reduce marketing costs
Speaker Notes:
The decline stage is the end of the product life cycle. Here the sales start to drop, sometimes due to environmental reasons. The company has two options for the decline stage deletion or harvesting. If the company chooses the more drastic option of deletion products will be discontinued and removed from the marketplace. The more used option is harvesting, the product will be continued to be offered in the marketplace while reducing marketing costs. This is done by minimizing any advertisement. The harvesting option helps with the brand, in almost every marketplace there are some die hard fans to the product. This allows the most loyal fans to stay with their product. In the decline stage prices tend to drop, and the company does not issue any new versions of the product. The competition remains unchanged, since the profit is minimal.
Fitbit
Has not entered into this stage yet.
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product life cycle (PLC)
Importance
Help managers characterize the main marketing challenges
Help develop major alternative marketing strategies
Maintain a product / market balance
Implications
Lower profit margin
Shorter life of the product
Speaker Notes:
By using the product cycle it can help managers characterize the main marketing challenges while the product is in the marketplace while also helping develop any major marketing strategies for each new stage (Sharma, 2013). This helps the company maintain a high profit margin. If managers do not keep up to date with the life cycle of the product this can result in a lower profit margins and a shorter overall life for the product itself, which can cost the company a lot of money.
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References
Kerin, R. A., & Hartley, S. W. (2017). Marketing (13th ed.). New York, NY: McGraw-Hill Education
Fox, K. (2013). True Benefits Of Production Life Cycle Management. Retrieved from http://www.imsmarketing.ie/news/true-benefits-of-product-life-cycle-management/
Fitbit. (2017). Why Fitbit?. Retrieved from https://www.fitbit.com/whyfitbit
Hum, S. (2015). How Fitbit Grew To Become the Best-selling Fitness Tracker in 5 Years. Retrieved from https://www.referralcandy.com/blog/fitbit-marketing-strategy/
Miller, T. C. (2017). Top 10 Best Alternatives to Fitbit Fitness Trackers. Retrieved from http://heavy.com/tech/2015/02/top-best-alternatives-fitbit-fitness-tracker-withings-jaybird-jawbone-pebble-garmin/
Marketing Guides. (n.d.). Strategic Planning Pricing Strategy. Retrieved from http://www.marketingmo.com/strategic-planning/how-to-develop-a-pricing-strategy/
SHARMA, DR. N. (2013, March). Marketing Strategy on Different Stages PLC and it's Marketing Implications on FMCG Products. International Journal of Marketing, Financial Services & Management Research, 2(3), 121.
Image References
Fox, K. (2013). True Benefits Of Production Life Cycle Management. Retrieved from http://www.imsmarketing.ie/news/true-benefits-of-product-life-cycle-management/
Fitbit. (2017). Why Fitbit?. Retrieved from https://www.fitbit.com/whyfitbit
princ3sssava, . (2016). FitBit History. Retrieved from https://www.timetoast.com/timelines/fitbit-history
