INTRODUCTION PRODUCT LIFE CYCLE
The product life cycle is regarded as an omnipresent concept in marketing. The product life cycle concept (PLC) suggests that like every other form of life on earth, a product or service also has a limited duration. As soon as a product enters the market it starts a “life cycle” and subsequently will disappear from the market.
The product life cycle theory also suggests that a product all along its life cycle should go through specific phases or steps which will symbolize particular marketing strategies or plans. The main aspects of each phase come as follows:
At the introductory phase, products or services are new to the market, unknown to the public or customers and therefore with no or very few competitors. The chances of success at this stage are very low and the foremost sales tend to be quite slow. The only consumers available at this phase are the ones predisposed to take risks and try new products.
Sales volume being low and marketing expenses being very high, the amount used to launch the product is considered as a long-term investment.
The greatest work to do at this level would be to bring the product to the attention of buyers and salesperson or traders through advertisement which will reinforce awareness of the product; pricing strategies. There are two kinds of pricing strategies: “skimming” which is to introduce the product in the market with higher prices and slowly decrease them with time; and “market penetration” which is introducing the product in the market with low prices to rapidly attain higher levels of market shares.
At this phase, if the product or service is appreciated by the innovator costumers, it starts rising profits and sales volume increase as other customers are also keen to try the new product. As sales grow high we can expect a big number of competitors entering the market and at the same time marketing strategies should be developed to beat back new competitors.
In the maturity stage, there is a slowdown and stabilization period in the sales growth of the product as sales level decreases. This situation brings about more producers and so more products; in other words, overcapacity that leads to a strong competitive condition. With this competition, rivals try to create innovative better product and introduce it into the market with the support of advertisement and promotions and eventually the market prices reduce and a drop in profit occurs. Competitors which are able to defend market share and meet the customer’s changing demands have a competitor advantage over the others and maximize the profitability.
Asos.com can order more stock in order to provide the sufficient product for the loyal and new consumers. It can also go to sales by reducing the prices; but it may be rational to advertise the product on its website, magazine, newspaper or social media to increase the sales and profit.
Demand for the existing product begins to drop and sales fall down in decline stage. The probable results of the decline are new technologically advanced products, changes in preferences of consumers, changes in social and political environment and intensified competition. While sales and profits go down, some competitors withdraw from the market that cause smaller market segments and some try to continue to sell out with low price and promotions. (Lambin, 2007)
The rate of decline depends on the type of the market, product and customer; for example if it is a fashion or technological market, the decline is generally faster. But the decline of some other products can take ages because of some loyal purchasers that hold back from shifting product types.
There are different factors that affect the level of financial commitment at each stage of the product life cycle. Therefore, the knowledge of the product life circle is of particular importance to the managers of Asos.com due to the nature of its business. A significant factor that affects the demand for any product is taste and fashion. As a result, the fashion industry is systematically dynamic with new product rapidly replacing old one. The fashion industry is fast-moving and the individual product life cycles may be seasonable.
Accurate knowledge of the product development life cycle will further help Asos.com managers in the timing of promotional activities and advertisement. This in vital as poor timing will result in the reduction of the company’s value as the expected return may never be realised Accurate knowledge of the product development life cycle will aid planning. Planning is defined in this contest as the representation of business activities in quantifiable terms. Managers will obtain internal and external data about the product,analyse such data which will aid decision making. Internal data include those obtained from the company such as cost of production while external data include market research study and those obtained from competitors websites.
knowledge of the product development life cycle will help managers in the coordination of product activities. Coordination in this contest can be defined as keeping abreast of ongoing activities so that it doesn’t drift. This will enable managers determine the exact time to lunch the new product and determine the exact type of support required for existing product.Knowledge of the product development life cycle will help managers in the control of product activities.
The promotional strategies are
Assortment of information from buyers – With the help of users information ASOS.com collect information about its clients with regards to their trends, purchasing behavior, patterns, taste, type of products they like, attitude, spending power, etc. Moreover, it also helps in identifying demographic factor of individual, so that company can design or supply their product accordingly.
Fashion blog – A fashion blog is also runs by website along with articles in relation to entertainment and celebrities, which is linked with items provided on it. In such blogs videos of models and heroes are posted who are dressed with the ASOS.om apparels.
Advertisements in magazine, newspaper and several other publications – The department of public relations of website has targeted towards the wide range of publications like advertisements in few leading number one magazines of world, i.e. Elle, Vogue, GQ, etc, advertisement in Harper’s Bazaar and articles in The Times newspaper. The website also publishes a monthly magazine as well as launched an application for the users of facebook where interested customers can access directly on the website and make purchase of their liked products.
Software for customers – Software is specially developed for customers, where they can be able to see the image that how clothes would be looking on themselves and then can make purchase of it from the online store. Customers who wishes to try out the clothes before making actual purchase of it are perfectly satisfied with this particular option of website, which also makes the site enough competent to make strong competition from actual stores presented in t