The Product Life-Cycle Concept

Because we live and work in a dynamic market situation, managers must accept as the normal state of affairs that all products have a limited life. This fact is commonly expressed in the form of the product life-cycle curve. Products during their existence go through the phases indicated on the curve, as follows:

1. Starting before, sometimes long before, a product reaches the marketplace, there is a development phase. Market research must be undertaken, the product designed, prototypes built, plants laid down. While costs can be very high, income will initially be nil and will probably grow only slowly. Profits are a long way off yet. Many products are slow to ‘catch on’ and this part of the curve typically does not rise steeply.

2. During the growth phase the product reaches general acceptance, and sales increase steeply. Profits mount as development costs are recovered and unit costs decrease with greater volume of production.

3. As the product reaches maturity, initial demand is beginning to be satisfied, competitors may have arrived on the scene, and there will be greater reliance on replacement sales. Sales increase more slowly, and profits come under pressure and may start to decline.

4. When the market is fully saturated, sales will ‘peak off’ and profits decline still further.

5. Finally, sales will go into definite decline and margins come under very severe pressure as it becomes increasingly costly to maintain sales at a reasonable level.

The curve for any particular product may be steeper or flatter, the time-scale may be longer or shorter. Some products seem to go on for a very long time. For this reason the pattern must be applied with care. In addition, we must be careful what we mean by a product in this context: for example, the market for glass has risen steadily over the past 50 years, but within this period the sale of lamp glasses has declined and that of milk bottles has risen steeply (to decline again in some countries in face of competition from waxed cartons or plastic and the change from doorstep delivery to bulk purchase from the supermarket).

Nonetheless the typical pattern stands as a warning that it is dangerous to rely too heavily for too long on one product, so that, as profit from one declines, profit from its successor rises to fill the gap. Ideally this will give a steadily rising profit for the company as a whole, even though some products have entered the ‘decline’ phase of the product life-cycle.

It must be emphasized that the product life-cycle diagram is not a rigid description of exactly how all products always behave. Rather it is an idealized indication of the pattern most products can be expected to follow.

There is nothing fixed about the length of the cycle or the lengths of its various stages. It has been suggested that the length of the cycle is governed by the rate of technical change, the rate of market acceptance and the ease of competitive entry. So, each year numerous new fashion styles are introduced, many of them to last only a few months. At the other extreme, a new aircraft must have many years of life if it is to be commercially worthwhile.

The main importance of the life-cycle concept is to remind us constantly of the three following facts:

1. Products have a limited life;
2. Profit levels are not constant but change throughout a product’s life in a way that is to some extent predictable;
3. Products require a different marketing programme at each stage of their life-cycle.

Implications of the Product Life-cycle

If we have to accept that no product will go on earning profits indefinitely, then we must plan so as to have a whole succession of new products coming ‘through the pipeline’. Peter Drucker has drawn attention to the need to keep all products under review to ensure that not too high a proportion are at the end of their life-cycle. He describes the following six categories:

1. Tomorrow’s breadwinners – new products or today’s breadwinners modified and improved;
2. Today’s breadwinners – the innovations of yesterday;
3. Products capable of becoming net contributors if something drastic is done;
4. Yesterday’s breadwinners – generally products with high volume, but badly fragmented into ‘specials’, small orders and the like;
5. The ‘also raps’ – generally the high hopes of yesterday that, while they did not work out well, nevertheless did not become outright failures;
6. The failures.

Product Elimination

From the product life-cycle concept and Drucker’s analysis of product categories, it follows that all products must be kept under review to assess their present and likely future contribution to profits. A common mistake of marketing management is to keep in the range products that have little or no prospect of contributing to profits. Products are kept in the range until they fade away, meanwhile consuming valuable resources, which could be more profitably utilised elsewhere. These marginal products lower the company’s profitability, and it is essential to control them.

Source: http://en.articlesgratuits.com/the-product-life-cycle-concept-id1560.php

8 MLM Prospecting Tips On How To Turn Your Prospects Into Productive Business Partners

I don’t care what company you are in the vision of a business & salesperson should be to turn their prospects into business partners.

“So Keep Reading Because This Gets A Lot More Interesting…”

Your prospects are drowning in pain & begging for help so stop & ask yourself this: Is the product or service you have to offer going to get rid of their pain if so then why aren’t you helping them? It’s your responsibility to make their pain go away!

8 MLM Prospecting Tips On How To Turn Your Prospects Into Productive Business Partners…

MLM Prospecting Tip #1…Get Off Your Butt Get Out Here & Get Acquainted:

Establishing trust & credibility in this field is a must so start networking with your niche this helps you relate to them & get a better understanding of what they are going through. This is also where having a good marketing strategy falls into place, it allows you to get to know others & eventually inform them about your business?

A marketing simple strategy can start with Facebook, Twitter or LinkedIn or the social bookmarking sites.

MLM Prospecting Tip #2…What Are Their Pressure Points?

Can you feel the agony & pain they are going through right now? If so then you need to get to the bottom of it before you start talking about your opportunity, after you find out what problems they are having then you can focus on how your opportunity will help change their lives.

MLM Prospecting Tip #3…Time To Approach The Situation:

OK in order for you to do this successfully you have to give them a clear understanding that you have something of value to offer so it’s time to get down to the true need of your prospects & you can do this by listening to what they have to say.

After they are done talking you can ask any questions you may have just be sure you are paying close attention to what they are saying because you may have a winner standing right in front of you!

MLM Prospecting Tip #4…Give Valuable Solutions Away For Free:

Your prospects have to know that you’re not in it just for the money & if you are then you’re doing nothing but wasting your precious little time. You must figure out what you can give away at no cost?

Do you have any training materials or tools that you can give away? Providing value upfront is called “attraction marketing” it makes those in your niche more drawn to you because you are educating them on what to do & how to do it.

Learn how to become creative & have fun with what you’re doing, it as time goes on you will start seeing your business expand a lot more.

MLM Prospecting Tip #5…While Consistently Providing Value It’s Time To Start Presenting The Valuable Products That Cost:

Giving away free products is good but you are still building a business so you have to start earning income & if you are only giving away freebies then how in the world are going to build a profitable business?

The more valuable your products & services become the sooner you can start charging a fee for them, besides you can’t earn any “Return On Your Investment” if you don’t start charging for your services at some point & time. The best way to get started is by offering your products at a low price on the front end.

There are (3) ways you can offer your products to your niche along with a call to action:

List Of Subscribers

Blog Posts

Writing Articles

MLM Prospecting Tip #6…Provide So Much Value That They Can’t Hardly Stand It:

They paid for your product right? So you have to provide so much value that they are overwhelmed this lets them know that they got more than they paid for!

At this point it’s time to deliver tons & tons of value on your low cost item & while you are at it you can throw in a free bonus: reports, ebooks, video trainings, private coaching calls, etc… this will make them want to network with you even more & it keeps the relationship growing stronger.

MLM Prospecting Tip #7…Next Start Offering Your Higher Prices Items:

If the lower price item is packed with tons of value then they won’t mind paying for the higher priced items because they know they are going to benefit from it.

Here you can offer your best product or opportunity especially after you have done steps 1-6 at this point they have built up enough trust with you & they trust you enough to where they feel good about making a quick decision!

Do you realize what you have done so far?

You have consistently nurtured them, picked the ones that are teachable, willing to pay & ready to work with you. Plus your actions speaks for themselves by showing that you are a trustworthy person that’s sincerely ready to help others.

You can let your website, webinars, conference calls speak for themselves & now you can present your business & talk about the advantages they have of personally working with you.

MLM Prospecting Tip #8…Time For A Check Up:

Now it’s time to do a check up on what you’ve been working on:

What worked & what didn’t?

What should you have done differently to get a better outcome?

What do you need to test & tweak?

How is your squeeze page working out?

Doing a reality check keeps your mind fresh & lets you know what you need to do differently to improve things. This is also a great time to check over your goals to make sure you are on staying on task.

My Last Conclusion…

Don’t be afraid to take control of your business because the prospects in your niche are looking for someone to lead & guide them in the right direction.

Online Business Information You Must Not Fail to Put Into Practice

If you are about to start your own business online and you feel like you are losing your way through it, don’t fret. It is a normal feeling for anyone who is about to start something big. Many people mistake an online business as something simple and easy. What they do not know is it could get pretty stressful too. An online business is a real business. It’s as big as any venture in the real world. Risks are also involved in internet business and you can not just sit there and wait for things to happen. Now, to help you stay in the right track, below are some pieces of online business information you must not fail to put into practice.

First, you have to define the line between force and power. Forcing is shoving things so they will work the way you want them to, but in real life, things do not always come your way. It is more important to have the power which implies your willingness to get things done even when something goes wrong along the way. You gain power when you align you beliefs, emotions, and energies to fulfill an action. Don’t you remember the time when you felt very confident about yourself? Weren’t you able to get things done fast and well then? You have to muster that power.

Secondly, you have to attain rather than accomplish. This online business information to help you succeed may sound confusing, but it really isn’t when you look closer. Many online entrepreneurs fail to distinguish their difference and so they become an issue. Accomplishing is simply reaching an end point, like being able to sell a product. Once you have sold the product, the accomplishment feels meaningless. On the other hand, attainment has no end. It provides you with a long-running inspiration and comfort. It is knowing deep within you that what you continue to do is fruitful and that it goes beyond you and your business. It’s the spiritual knowledge that you attain through the whole experience.

Thirdly, you should focus on acting what you learn than simply continue gaining information. There are so many tips on how to be successful in running an internet business and you may be drowning in them, but the more important thing to do is how you make great tips work for you. You should not go on reading books and attending seminars forever without applying what you have learned from them to your business. If you do, your efforts would be futile. It is better to gain some information once in a while and immediately put the useful ones into practice than overload your brains with good business advice and not try any of them at all.

All these pieces of online business information are definitely useful. However, one last thing you should not forget is to practice them with joy. When you work hard, you concentrate on the “must do’s” only, but, you have to recognize the fact that it is more important to work joyfully. When you work with joy, you work in tandem with your desire and your spirit and this makes working more sensible and fun.

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