Understanding the Product Life Cycle and Advertising Strategy

Life Cycle of a Product

Definition

The product life cycle is the chronological process that occurs from birth or product launch to the market until death or disappearance.

Stages

• 1. Previous Stage (Development): Product development begins when the company finds and develops the idea for a new product. During this phase, there are no sales, and the company accumulates investment costs.
• 2. Introduction Phase: A period during which sales record slow growth while the product is introduced into the market. At this stage, there are no profits due to high introduction costs. Strategic approach: Expanding the market.
• 3. Growth Phase: A period of rapid market acceptance and increasing profits. The product completes its final positioning, consolidates coverage, and begins to increase its market share. Strategic approach: Penetrating the market.
• 4. Maturity Phase: Sales growth levels off because the product has been accepted by a large proportion of potential buyers. Profits stabilize or decrease due to increased marketing efforts to defend the product against competition.
• 5. Decline Phase: A period during which sales and profits decrease. This stage is often caused by changes in customer behavior, innovative technology that renders the product obsolete, or strategic mistakes by the company.

Advertising

Advertising is any paid, impersonal transmission of information through media, aimed at a target audience where the issuer is identified with a specific purpose, such as stimulating demand or changing the behavior of the recipient.

Features

• It is a promotional tool that seeks to inform, persuade, and remind.
• It is unilateral, impersonal, and massive.
• The issuer is identified and the message is controlled.
• It is a paid service aimed at a specific target audience.

Purposes of Advertising

Basic Purposes

• Inform: Educate about a new product, new uses, price changes, or building a company image.
• Persuade: Build brand preference, encourage re-branding, or change perceptions about product attributes.
• Remind: Keep the product in the buyer's mind and ensure they know where it is available.

Personal and General Purposes

• Stimulate demand.
• Customize: Influence views, attitudes, desires, and behaviors of consumers.
• Act: Influence the consumer at the cognitive level (awareness), affective level (attitude change), and behavioral level (taking action).