The product life cycle is a marketing theory cycle or succession of strategies experienced by every product which begins with a product's introduction, sometimes referenced as research and development, followed by its sales growth, then maturity and finally market saturation and decline. Through the stages of product life cycle, the product involves many professional disciplines, skills, tools and processes due to market forces that involve costs, raw materials, various business processes and distribution to markets and sales. The understanding of a product's life cycle can help a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the product's success or failure. As same as the other new product, Samsung F-Trust progresses through four sequence of stages that is from introduction to growth, then maturity and decline.
In January 2017, Samsung F-Trust will firstly introduce in Malaysia then will expand to international market. The first stage in the product life cycle characterized by high research and development (R&D) and high production costs. The marketplace may be unfamiliar with the product. Consequently product sales show a slow growth during the introduction phase. So companies invest heavily in advertising and promotional activities to achieve product and brand name recognition in the minds of the consumers. Samsung has to be careful monitored it to ensure that the new product grow consistently because there is no profit at the beginning of stage. The volume will normally only increase once a number of potential customers become aware of the new product and the benefits it has for them. We estimate that our introduction stage will begin on 2017 and end on 2018.
• Public awareness is very important to the success of a product. If people don't know about our product they won't go and buy it. During this stage, product and brand strategy is established to develops brand awareness.
• Maximize quantity will be our pricing objective of Samsung F-Trust. According to our price objective, penetration pricing strategy will be adopted by Samsung to create awareness of our new product towards our target market.
• Distribution is selective until consumers show acceptance of the our new product.
Having our new product in every location is very important and is regarded as an impossible challenge in this introduction stage. We will try to make our product available to our target market.
• Promotion is aimed to create brand awareness. Promotion spending is relatively high for this stage due to we need to inform consumers of our new product. For example, TV, radio and other promotion media are important in term of creation awareness.
The second stage of product life cycle, growth is characterized by rapid increase in sales. Customers begin aware of our new product and its benefit and having interest on the product. Growth stage for our product Samsung F-Trust, we estimate for 1 years period which from 2018 to 2019. The goal of this stage is to gain customer preference on our product and increase sales.
• Samsung's quality is maintained and additional features may be added such as introduce more new colour and packing option to attract customer. Additional product features will helps boost its appeal to potential buyers.
• Sales will be extremely high. Consumers will become aware of our product through advertising and promotions. Our company will usually continue with the same price strategy.
• Distribution channel will be expended as a competitive advantage to competitor. This is because it will become more convenient for customers to purchase our products. During this stage, demand increases and customer is accepting our new product. We still will display Samsung F-Trust on hand phone service centre and shopping mall to promote and provide our new Smartphone to the end customers.
Maturity stage is the third stage in the product life cycle, product's sales growth will slow down. Sales increase at a decreasing rate as fewer new buyers enter the market. Greater competition occurs because competitors begin marking down prices, increasing their sales promotion and upping their product development budgets to find better version of the product. The primary objective at this point is to defend market share while maximizing profit. Based on our estimation, maturity stage of our product is start from 2020.
• Profits will likely be higher during the maturity stage than any other stage but competition will make it difficult to acquire many new users. Increasing market share becomes the important during the maturity stage which normally requires lowing the prices and discounting.
• Modifications are made and product features may be enhanced to differentiate the product from competitors. Evolve product is a must in order to meet changing consumer wants and needs. Our product's features may continue to be renew from time to time.
• Major consideration in this stage is to control overall marketing costs by improving promotional and distribution efficiency.
• Advertising expenditures will be reduced due to the strong brand awareness of the product .However, promotion price and price discounts will be given to Samsung F-Trust distribution channel members and also the end customers which is our target market to attract more customer to buy our product.
Decline stage is the fourth and last stage of a product's life cycle which characterized by fast declining sales revenue and leave fewer customers. Sales may drop to a low level where they continue for many years and the product will probably withdraw from the market in this stage. The price must competitive and promotion will be reduced compare to others stages. Distribution is narrowed and will kept the basic channel that is sufficient and eliminate the alternative channels.
In this stage as sales decline, we have several options.
• We will maintain the product in hope that competitor will exit by adding new features and finding new customers. The number of products in the product line maybe reduced.
• Distribution will becomes less and more selective. Channels that no longer profitable are phased out.
• Prices maybe lowered to liquidate the inventory of the product.
• Cut the promotion budget in order to reduce cost.
We will choose to continue offer the Samsung F-Trust even in the decline stage. Before we continue to offer the product, we will ensure that the profit from the Samsung can cover all the expenses incurred on the product. In decline stage, profit will decline that caused by decrease in sales. We will start to reduce costs on it especially on promotion and distribution costs to avoid the losses of company.
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