A product life cycle - are five main stages that a product goes through in its lifetime.() The cycle begins with product development stage, where company creates its product, then, company introduces it into the market, after introduction, sales of product may be growing and then it may reach highest point of sales at the maturity stage, after reaching highest point, traditionally, it declines. If organisation wants to postpone decline of product and make maturity stage as long as possible, organisation might use product life cycle extension strategy. Extension strategy extends the life of the product before it goes into decline and keeps sales of a product in highest point (). This essay will explore 2 product life cycle extension strategies (product adjustment and promotion), what do they consist of, and case study on how companies may use these strategies to make life of a product longer and increase sales. To provide evidence of how these strategies may be used in a real life, examples of Apple company and Starbucks will be given.
There are 2 types of product life extension strategies: product adjustment and promotion.() First one is a product adjustment strategy, it may be realized by adding new features to a product, improving existing features of a product, extending the range of a product or changing impression of a product, for example, by changing packaging. This strategy is more suitable for products, which have already been introduced to the most of potential markets and most of customers know about the product. Good examples of companies, which can use this type of strategy are Apple or Microsoft, as their products are already introduced to the most markets in the world and the only way to extent product life cycle is to add something new to a product or improve existing products. Second strategy is a promotion strategy, it may be done in the following ways: price reducing, advertising in media, exploration of new markets or creating special offers.() This strategy is better for products, which have good potential of being sold in a new markets or being introduced to new customers. This type of strategy may be used by companies such as Starbucks, Paypal or Burger King, because they may introduce their product to new countries, where they do not have branches and their product has good potential, for instance, Ukraine or Belarus. Technology companies such an Apple, Microsoft or Samsung etc. need to update their products more offen than other companies due to growing demand for new devices and high competition. Apple is an American multinational company that designs, produces and sells consumer electronics, online Services and computer software. Apple was founded in 1976 by Steve Jobs, Steve Vozniac and Ronald Wayne. Among Apple`s products are Iphone, Ipad, Mac and a lot more other products. Apple is also second valuable brand in the world with brand value of 146.3 billions US dollars (). In it`s marketing strategy, Apple actively uses product life cycle extension strategy, espesially product adjustment strategy, which includes adding new features to a product and improving existing features of a product. Apple Iphone is the most profitable product of Apple, it is a line of consumer smartphones, which was released in 2007. Since then, Apple launched 16 updated versions of Iphone. Iphone`s success is mainly based on its unique design, intuitive interface and innovative technology.()Apple's smartphones have an average life cycle from two to three years and new models are released once a year (). Representative examples of using product updating strategy are Iphone 7 and Iphone X models. Iphone seven was launched to the market in September 2016. During the third and fourth quarters in 2016 sales were growing rapidly and at the first quarter 2017 it reached maturity stage with sales of 78.29 millions units. Then, in second and third quarters sales were deacreasing as most of Apple`s customers had already bought new product. To extent product life cycle Apple decided to launch two new models of Iphone - Iphone 8 and Iphone X. To attract new customers and give existing customers an opportunity to update products, Apple improved existing characteristics of previous model and added to Iphone X a lot of new features, which significantly changed the product. They improved memory capacity, camera settings such as zoom, battery capacity and Blutooth connection. A lot of new features were added to a new phone, including: Face ID, wireless charging and portrait mode. Furthermore, Apple created innovative design of an Iphone, which includes full-format screen and backside of the phone was made of glass. New models of iphone 8 and Iphone X were introduced to the market in September and November 2017. As a result, during last two quarters of 2017 sales were growing rapidly, with sales of 41.03 and 46.68 millions of sold units. At the first quarter 2018, updated Version of Iphone reached maturity stage with sales of 77.32 millions of old units. Moreover, as product was significantly improved and a lot of new features were provided, Apple made start price of Iphone 8 and Iphone X 700 and 999 US dollars per unit, which is a lot higher than start price of Iphone 7 - 649 US dollars. However, some of added to new models features were disliked by customers. For example, one disadvantage of the Iphone X is very high price for installing new full glass screen and backside, if person brake it. Some of customers also disliked full glass screen and backside as they make the smartphone heavier than it was before. From case Study of Apple company it is clearly seen that product adjustment strategy may give a company a lot of benefits. Firstly, when company updates a product, if existing features are significantly improved and new features are added, customers may update their old versions of a product into a new ones. Secondly, product updating strategy may create higher value for a product. As a result, the price may also be higher. Thirdly, if company adjusts their products regularly, for example, as an Apple company, it may increase brand reliability. However, product adjustments also has disadvantages. Development of product with new features and prototype production may require a lot of money and time for company, consequently, it may be difficult to use this strategy for small and average oranisations. In addition, if company add new features to a product, some of customers may dislike a product as in case of Iphone X. Strategy of entering new markets may be used by companies in food Industry as cafes and restaurant can explore markets in new countries. One of these companies is Starbucks coffee. Starbucks Corporation is an American coffee company and coffeehouse chain. It was founded in 1971 in Seattle, Waschington. Starbucks is the biggest coffeehouse company with 28,209 stores located in 76 countries in all over the world (Levesque, 2018). Starbucks locations serve hot and cold beverages, whole-bean coffee, microground instant coffee, full-leaf teas, pastries, snacks and sandwiches. According to Millward (2018), Starbucks has market share of 39.8% in US and brand value of 9,615 millions USD, which is 57th valuable brand in the world. In 1995, the company started its international markets exploration by entering Japan,and then many other countries. It entered China mid-1990s with a distribution business, before making a full-fledged entry with its retail stores in 1998.
As company has stores in 76 countries around the world, it may be argued that it successfully used new market exploration strategy plenty of times, one evident example of using this strategy is Starbucks exploration of the Chinese market. The reason for enetering Chinese market in 1999 was not declining of products in other markets, they wanted to increase profits, make company grow and extent product life cycle.
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