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Levitt Product Life

Cycle Model that shows how products move from Introduction, Growth, Maturity and Decline over time.

Charlie Moreno

on 2 October 2012

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Transcript of Levitt Product Life

Levitt's Product Life Cycle Overview Introduction Stage Growth Stage The product cycle has a major impact on a companies strategic planning Summary Maturity Stage Decline Stage Termed by Theodore Levitt in 1965 Describes stages that products go through and how it impacts associated cash flows Modern product life cycle is becoming shorter and shorter Life cycle affects a companies product planning Product analysis can help predict expected future sales to adjust product strategies Primary goal: Establish a market and build customer demand Marketing costs are high to build product awareness Profits are low or negative Product sales are low and growth is slow to increase Primary goal: build brand loyalty and market share Profits increase Promotional costs spread Period of rapid sales growth Economies of scale Competition increases and marketing cost remain relatively constant weak competitors start to drop out the market Primary goal: Defend market share while maximizing profits Sales growth rate slows and sales volume peaks Downward pressure on prices due to competition Increased R&D cause profits to slightly decrease Primary Objective: Reduce expenditures Characterized by a dramatic decline in sales and profits Company must choose a strategy to address declining sales and profits Maintain Drop Harvest The Product Life Cycle Applied to the Blackberry........... First iPhone iPhone 5 Do you notice any similarities? As products mature companies must adjust their product plan to stay competitive This involves constant market analysis and investment in R&D Armstrong, Gary, and Philip Kotler. Marketing: An Introduction. Upper Saddle River, NJ: Pearson Prentice Hall, 2009. Print. Work Cited "Product Life Cycle Model." Product Life Cycle Model. Tom Spencer, 25 Jan. 2009. Web. 01 Oct. 2012. <http://www.tomspencer.com.au/2009/01/25/product-life-cycle-model/>. "Product Life Cycle (Levitt)." Product Life Cycle (Levitt). N.p., n.d. Web. 31 Sept. 2012. <http://www.12manage.com/methods_product_life_cycle.html>. Hickey, Andrew R. "From Brick To Bold: The Evolution Of The BlackBerry." From Brick To Bold: The Evolution Of The BlackBerry. CRN, 04 Sept. 2008. Web. 01 Oct. 2012. <http://www.crn.com/slide-shows/channel-programs/210500069/from-brick-to-bold-the-evolution-of-the-blackberry.htm?pgno=1>.
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