Автор работы: Пользователь скрыл имя, 22 Ноября 2012 в 08:44, курсовая работа
Product life cycle is a business term that refers to the stages in the progression of a product, from the conception of the product to the time the product starts to show inevitable signs of retrogression. A similar example is the life cycles of a butterfly: the processes they go through, starting from fertilization to the formation of the eggs, the caterpillar, the pupa and adult. Eventually, the butterfly will start to show signs of wear and tear until it dies. Knowing the various stages of the life cycle, the signs to look for and what to expect can be likened to the product life cycle in business. In this case, the subject is a product or service and the importance of this process includes the fact that it allows the manufacturers and various businesses to gauge the stage of production, which enables it to apply the relevant marketing principles. A role of product life cycle in business is its usefulness as a measure of the state of a product in correlation to the expectations of the consumers and the manufacturers. For example, it helps to consider the case of a product in the form of a smartphone that has been introduced into the market. The phone is received with much anticipation by the consumers and hailed as the most innovative smartphone yet. As the months progress, other phone companies bring out their own similar versions of the smartphone, diminishing the dominance of that particular smartphone on the market. Aside from this, the consumers are already yearning for a smartphone that will offer more than this one can.
INTRODUCTION………………………………………………..…………………3-4
1 THEORETICAL ASPECTS OF PRODUCT LIFE CYCLE
1.1Stages of Product Life Cycle……………..…………………………..…5-12
1.2 Product Life Cycle Analysis………….………………..…………...…13-17
1.3 Product Life Cycle Cost………………………………………..…...…18-21
2 EXAMPLES OF PRODUCT LIFE CYCLE ON THE BASIS OF INTERNATIONAL COMPANIES
2.1 Maggi. Experience of one of the most successful Nestle brand…...…22-24
2.2 BMW. Company with logical marketing plan………………..……….25-27
CONCLUSION……………………………………………………………...…...28-29
LIST OF LITERATURE………………………………………….…………………30
Today, Maggi is known throughout the world for its dry soups, seasoning sauce and instant noodle dishes.
In West Africa and parts of the Middle East, Maggi cubes are used as part of the local cuisine. Throughout Latin America, Maggi products, especially bouillon cubes, are widely sold with some repackaging to reflect local terminology. In the German, Dutch and Danish languages, lovage has come to be known as "Maggi herb" (Ger. Maggikraut, Du. maggikruid or Da. maggiurt), because it tastes similar to Maggi sauce, although lovage is not present in the sauce.
In Indonesia, Thailand and Vietnam Maggi seasoning sauce is a popular condiment used in flavouring meals, and the bottles are familiar sights on restaurant tables. [6, p.33]
Figure 4. Maggi Product Life Cycle
Introductory Stage
Growth Stage
Maturity Stage
Decline Stage If no product innovation brought
2.2 BMW. Company with logical marketing plan
“We’re fortunate right now at BMW in that all of our products are new and competitive,” says Jim McDowell, vice president of marketing at BMW, as he explains BMW’s product life cycle. “Now, how do you do that? You have to introduce new models over time. You have to logically plan out the introductions over time, so you’re not changing a whole model range at the same time you’re changing another model range.”
BMW’s strategy is to keep its products in the introduction and growth stages by periodically introducing new models in each of its product lines. In fact, in contrast to many auto manufacturers who launch a new model and then leave it unchanged, BMW works continually to improve its existing products. Explains McDowell, “Anyone can sell a lot of cars the first year, when a car is new. It is our challenge to constantly improve the car and to continuously find new innovative ways to market it.”
BMW started in 1916 as a manufacturer of airplane engines. “When you look at our roundel, the BMW symbol, it is a blue-and-white circle,” says McDowell, “that is meant to represent the spinning propeller on a plane, to remind us of our heritage.” Since then the company has added motorcycle and automobile production. Today, BMW is one of the preeminent luxury car manufacturers in the world.
BMW produces several lines of cars including the 1, 3, 5, 6, and 7 series, the Z line of roadsters, the X line of “sport activity vehicles,” and the M line of “motor sport” sedans. Currently, the U.S., Germany, and the United Kingdom are BMW’s largest markets. BMW recently introduced its 1 series—a compact car designed to compete with the Volkswagen Golf in Europe and the Rabbit in the U.S.—to attract a new younger audience. In addition BMW owns the MINI and Rolls-Royce brands. Combined sales of BMW, MINI, and Rolls-Royce exceed $59 billion and are expected to increase 40% by 2020. Reasons for the growing popularity of BMW include high-performance products, unique advertising, an award-winning website, innovations such as smart technologies that learn what the driver prefers, and new vehicles such as the V-series—which will compete with popular minivans.
BMW cars typically have a product life cycle of 7 years. To keep products in the introductory and growth stages, BMW regularly introduces new models for each of its series to keep the entire series new. For instance, with the 3 series, it will introduce the new sedan model one year, the new coupe the next year, then the convertible, then the station wagon, and then the sport hatchback. That’s a new product introduction for five of the seven years of the product life cycle. McDowell explains, “So, even though we have seven-year life cycles, we constantly try to make the cars meaningfully different and new about every three years. And that involves adding features and other capabilities to the cars as well.” How well does this strategy work? BMW often sees its best sales numbers in either the sixth or seventh year after the product introduction.
As global sales have increased, BMW has become aware of some international product life cycle differences. For example, it has discovered that some competitive products have life cycles that are shorter or longer than 7 years. In Sweden and Britain, automotive product life cycles are 8 years, while in Japan they are typically only 4 years long.
BMW uses a system of “product advocates” to manage the marketing efforts of its product lines. McDowell explains that a series advocate would actually use and drive that series and would constantly be thinking “How can I better serve my customer?” In addition to modifying each model throughout the product life cycle, BMW modifies the markets it serves. For example, during the past 10 years BMW has expanded its market by appealing to a much larger percentage of women, African Americans, Asians, and Hispanics. BMW’s positioning strategy is the same worldwide and that is to offer high-performance, luxury vehicles to individuals. “You won’t find it as a taxi or a fleet car,” says McDowell. Generally, once a model is positioned and introduced, BMW avoids trying to reposition it.
“BMW is fortunate—we don’t have too much of a dilemma as to what we’re going to call our cars.” McDowell is referring to BMW’s trademark naming system that consists of the product line number and the motor type. For example, the designation “328” tells you the car is in the 3 series and the engine is 2.8 litres in size. BMW has found this naming system to be clear and logical and can be easily understood around the world.
The Z, X, and M series don’t quite fit in with this system. BMW had a tradition of building experimental, open-air cars and calling them Zs, so when one of them was selected for production, BMW decided to continue with the Z name. For the sport activity vehicles BMW also used a letter name—the X series—since the four-wheel-drive vehicle didn’t fit with the sedan-oriented 1, 3, 5, 6, or 7 series. The M series has a 20-year history with BMW as the line with the luxury and racing-level performance. The lettered series now includes the Z4, X3, X5, M3, M5, and M6. Compared to the evocative names many car manufacturers choose to garner excitement for their new models, the BMW numbers and letters are viewed as a simple and effective branding strategy.
In the past BMW has built a brand personality for its vehicles with high-visibility product placements. BMW products, for example, have been featured in four James Bond films. Similarly, BMW hired master directors to create a series of Internet-based mini-movies called “The Hire,” which featured “the ultimate driving machine” and edgy actors. The movies were so successful and attracted so much attention from consumers and industry experts that the movies have been placed into the Museum of Modern Art. Other marketing programs that contribute to the BMW brand personality include the BMW Art Car Collection, created by internationally acclaimed artists, sponsorship of America’s Cup and Formula 1 Series racing teams, and events such as the BMW Golf Club International tournament.
One of the ways BMW is improving its product offerings even further is through its innovative website (www.bmwusa.com). At the site, customers can learn about the particular models, e-mail questions, and request literature or test-drives from their local BMW dealership. What really sets BMW’s website apart from other car manufacturers, though, is the ability for customers to configure a car to their own specifications (interior choices, exterior choices, engine, packages, and options) and then transfer that information to their local dealer. As Carol Burrows, product communications manager for BMW, explains, “The BMW website is an integrated part of the overall marketing strategy for BMW. The full range of products can be seen and interacted with online. We offer pricing options online. Customers can go to their local dealership via the website to further discuss costs for purchase of a car. And it is a distribution channel for information that allows people access to the information 24 hours a day at their convenience.”
The ultimate extravagance in buying a car is having everything customized to the owner’s preferences. Today, 80% of European buyers and 30% of U.S. buyers use the BMW website to choose from 350 model variations, 500 options, 90 exterior colors, and 170 interior trims to create their perfect vehicle!
CONCLUSION
Business strategy and performance is affected to a great degree by life cycle stages of a product or service. Business priorities, budgeting, funding, production, distribution, marketing - all these production aspects change depending on how long a product or a service has been in the market.
The typical PLC consists of five main aspects: (1) product development; (2) introduction; (3) growth; (4) maturity; and (5) decline.
The Product Life Cycle begins with product development, during which time the firm devises and creates a new product. Whilst the end aim of this development process is to have a profitable, well-performing product on the market, this initial stage is characterized by zero sales, the firm bearing the costs of such development, typically resulting in negative profitability
The introduction of a new product onto the market is typically characterised by very slow sales, which may grow only very slightly over a long period of time. Whilst profits will gradually improve during this stage, it may take until near the completion of the introductory stage in the PLC before the company witnesses positive profitability.
The growth stage in the PLC typically involves a rapid growth in sales as early adopters replace pioneers as the main consumer group. Whilst pioneers are characterized as those consumers who purchase products almost immediately when new products are launched, early adopters wait until the price starts to fall and some of the product's potential weaknesses are ironed out.
The maturity stage in the PLC is a key point for a firm because it marks the turning point in the product's success. Typically, the growth in sales decreases quite significantly and manufacturer's over-capacity results in a reaction by the firm and its competitors to slash prices.
In most cases this eventually leads to the decline stage during which time the product's sales drop significantly and in some cases, rapidly, with profits continuing to fall until profitability becomes so low that the product is discontinued or a company leaves sales to continue but accepts that the product has passed its core selling years.
So, the Product Life Cycle indicates that products have four things in common: (1) they have a limited lifespan;
(2) their sales pass through a number of distinct stages, each of which has different characteristics, challenges, and opportunities;
(3) their profits are not static but increase and decrease through these stages; and
(4) the financial, human resource, manufacturing, marketing and purchasing strategies that products require at each stage in the life cycle varies.
Also what must be mentioned in this part are trends in Product Life Cycle.
One most observable trend is that product life cycles are becoming shorter and shorter. This is given mostly by ever-increasing competition. While a manufacturer of pots and utensils faced competition only from another manufacturer in the same city hundreds of years ago, a pot manufacturer these days faces competition from many companies on the other side of the globe in addition to other local manufacturers. Everyone is trying to come to the market with innovations.
Another important trend is that many products in mature industries are revitalized by product differentiation and market segmentation. It is not uncommon that companies try to find new niches and market segments when they see their product is about to enter the Decline phase. Any for-profit business is constantly seeking ways to grow future cash flows by maximizing revenue from the sale of products and services. Positive cash flow allows a company to invest in development of new products and services, to expand production capabilities, to improve its workforce, and so on. It is most companies' goal to acquire key market share and become a leader in its respective industry.
A consistent and sustainable cash flow from product that is well established and stabilized is the key to any long-term investment. And knowing only the product life cycle can help with this.
At the theoretical part were described not only the most important aspects of Product Life Cycle, but also such themes as:
While carrying out an LCA is a lengthy and very detailed exercise, the data collection stage is - in theory at least - relatively uncomplicated, provided the boundary of the study has been clearly defined, the methodology is rigorously applied, and reliable, high-quality data is available. Those of course are fairly large provisos: Interpretation, Problems, Contradictions, Recycling.
Breaking down the manufacturing process into such fine detail can also be an aid to identifying the use of scarce resources, showing where a more sustainable product could be substituted: Inconclusive and Tool.
The life cycle cost of a product includes not simply the cost of materials and labor to manufacture it, but in fact all costs associated with the product from inception to retirement. The idea of a life cycle approach to cost is not specific to embedded systems, but rather is more generally applied to very expensive capital purchases such as buildings, factory machinery, and military systems (ships, planes, tanks, etc.).
The life of a product is the shortest of three different aspects of system life: Useful Life; Technological Life; Economic Life.
Answered for all questions that has been put in the introduction part, follows again to note that not every product follow the same product life cycle curve. It would be very easy if every product went through the same fate or product life cycle. Most products in developed markets fail in the introduction phase. Their product life cycle is very short, and they do not even make it to the maturity stage.
It can also be founded such products with cyclical maturity phases. A product enters the decline phase of the product life cycle where it is promoted to regain customers again. If costs of getting the product back to the top of the market are small, and the product is well positioned or even protected from major competitors, then talk about a cash cow.
LIST OF LITERATURE
Web-sites