Product Life Cycle PDF

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Product Life Cycle...

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Product Life Cycle

Yolanda Bender University of the People BUS 5112: Marketing Management Dennis Medel, Instructor 2/24/2021

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Product Life Cycle The product life cycle begins after a product is developed and consist of four stages (Principles of Marketing, 2015). Those stages are: 

Introduction: The product in launched.

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Growth: The time for the product to establish market and increase profits.

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Maturity: Maintain market share and face challenges.

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Decline: Decrease in sales and profits

The marketing strategies used during each phase are unique and vary from product to product. For this analysis we are going to review a product that is in the decline phase of its life and one that is in the growth phase. Decline Stage The decline stage can be summed up as the beginning of the end (Product Life Cycle Stages, n.d.). During this stage the company experiences a loss of market share, a decline in sales and profits, and in many cases the end of a product line. Carrick Leathergoods Ltd is a British company established in 1987 to provide high end, personalized stationery covers to restaurants and hotels (Carrickleather.com, n.d.) They provide menu covers, check holders, conference mats, key holders, placemats, coasters, hotel amenity trays, hotel trash bins and other personalized leather items. These products have been marketed to the hospitality industry. They distribute the product directly to the consumer. Their website doesn’t not have the capability for online orders. The company has many competitors including leather menus that can be ordered through Amazon. Due to their large printer capability the company expanded their product line to include banners, floor vinyl’s, and other printed vinyl products. The decline stage occurs when sales decrease and continue to drop (Principles of Marketing, 2015). In the case of stationary covers for the hospitality industry there are two factors that have precipitated the decline in sales for Carrick Leathergoods Ltd. The first is technology. Restaurants had started using tablets with menus at each table to increase efficiency and reduce labor. The tablets enabled the customer to order, with those orders going directly to the kitchen or bar and pay while sitting at their table. The second, more devastating factor, is the pandemic that

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started in 2020. The pandemic changed the way that people order their meals at a restaurant and it is a change that is here to stay (Restaurant Business, 2020). The pandemic has done away with menu and check holders. Conferences and meetings will not be taking place for at least another year to year and a half. When they return leather mats, coasters, and key holders will be replaced by single use products. At this point in the decline stage the company has the option to gradually reduce the costs by the process of harvesting which is reducing costs in the production of a product gradually, or to divest themselves of the product (Principles of Marketing, 2015). I would advise this company to divest itself of this division and transfer the use of funds to its sign division and look for ways to create other leather products such a wallets or luggage tags. If I was the marketing manager, I would be turning my focus to the floor vinyl’s, posters, signs, and vinyl stickers. With the capabilities the company has to personalize products I would market the ability to provide custom COVID related products such as personalized floor vinyl’s to mark off social distancing protocols, signage to inform guests of sanitation stations and protocols, egress and ingress signs, and other customized products for the hospitality industry. I would use the relationships within the industry, built over the past 33 years, and reputation for quality to further differentiate our company from competitors. I would make use of direct sales (telephone) to past, current, and potential clients, email blasts to existing customers, and industry publications for advertising. I would also host webinars to keep clients informed of safety measures as the world moves through the pandemic Growth Stage During the product growth stage, the company will experience rapid growth in sales and profits. During the growth stage the company should consider adding features or support services, maintain pricing, increase distribution channels, and widen the audience for the product (Product Life Cycle, 2019). Square is a company that is in the growth stage. Square was founded by two tech giants, Jack Dorsey and Jim McKelvey, in 2009 (Investopedia, 2020) as a merchant service and mobile payment platform including point of sale systems. Within less than 10 years the app had been downloaded more than 33.5 million times. Square made its revenue by charging the users a 2.6% - 3.5% of each transaction plus $.10- $.30 to process the charges. This enabled merchants

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to be able to process transactions from anywhere with their mobile device. In September 2020 Square launched QSR codes which enable customers to order from their tables and reduce physical contact (The Verge, 2020). With the QR codes customers can open menus, order, and pay from their personal cell phones or tablets. Square is not the first, or only, company to develop this technology but it is sometimes a cumbersome process. The Square platform can be used by merchants that already have the point of sale system and it is available on Square’s free online ordering platform. Square’s products are delivered through the internet aa the apps are downloaded by the customer. PayPal and Venmo are competitors as far as payment platforms but they do not offer point of sale and online ordering systems. I would advise the marketing manager to not lower prices as they have the competitive advantage based on their existing products. By using their good reputation as an innovator, ease of use, and seamless integration I would be marketing the product to all food and beverage outlets by advertising in industry publications and direct sales effrots. Since the company has the contact information for customers of its other products, I would use email blasts to promote the safety, convenience, and cost advantages of the new QSR menu option to existing customers. I would make use of press releases and interviews since this company is known for being a leader in technology and the implied expert in the industry. When it comes to technology the ease of use is a huge feature to promote to operators who are already overwhelmed with other issues. Conclusion The two company’s profiled are at opposites sides of the product life cycle and their trajectories are very different. But this is also a study in strategic planning. Had Carrick Leathergoods Ltd conducted yearly SWOT analyses it would have recognized the threats posed by tablet menus and, perhaps, adjustments could have been made to the business model prior to their entire division being wiped out (Principles of Marketing, 2015). On the other hand, Square moved quickly to fill a void in the industry by recognizing the need for touchless ordering systems and providing a reliable, easy to use option. Marketing and the strategic plan go hand in hand when considering the options for products in varying stages of the product life cycle.

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References Investopedia. (August, 2020). What is Square, Inc? https://www.investopedia.com/articles/tech/021017/square.asp Migrator. (2019, May 31). Product life cycle. NIBusinessInfo.CO.UK. https://www.nibusinessinfo.co.uk/content/product-life-cycle. Principles of Marketing. (2015). University of Minnesota Libraries Publishing. https://doi.org/10.24926/8668.1901 (Original work published 2010) Product Life Cycle Stages. (n.d.). Decline. https://productlifecyclestages.com/product-life-cycle-stages/decline/ Restaurant Business. (June, 2020). How the coronavirus is reshaping ordering and payment. https://www.restaurantbusinessonline.com/technology/how-coronavirus-reshaping-ordering-payment The Verge. (September, 2020). Square launches QR codes that let you order from your table at a restaurant. https://www.theverge.com/2020/9/29/21456594/square-qr-code-order-restaurants-pandemic-menu...