Products' Lifecycle

Essay Instructions:

First, Run the Simulation using the Default Decisions. (in other words, use the prices and R&D% that are already there.) As you run each year, you will need to capture or collect the results for each year, for each product, X5, X6, X7. You need to copy (using Excel, by hand, or some other method) the Financial results and Marketing results, as well as the information provided by the Advisor. The final Total Score will be $1,165,110,357. SCENARIO It is December 15, 2009. Joe Schmoe, the VP of Marketing at Handheld, Corp., is smugly patting himself on the back for how well he has done with pricing and product development on the three products, X5, X6, and X7. He knows his strategy was not very creative, since he did not change any prices or R&D allocations over the four year period (actually six years, counting 2004 and 2005.) But he is certain that he did not need to change anything. And he's sure his overall performance is proof. But, Sally Smothers, CEO of Handheld, has a different opinion. And she does what she has to, Joe is called in and let go. Dang, Joe thinks, fired again. You are hired. You applied for the position a few weeks ago and interviewed, not sure of the fate of Joe Schmoe at the time. But you were the one that Sally wants. So here you are, Dec. 15, 2009, VP of Marketing at Handheld, and ready to move the company ahead into 2010. Your boss, Sally Smothers, is expecting you to take over and move the company forward in terms of product development, and smart pricing. Sally wants to make sure that you are ready to move ahead. So she asks you to review the past four to six years to see what was going on in terms of product development, sales, pricing, and performance against the competition. So you collect all of the data and write a report which is due on Sally's desk 1/2/2010. Your report includes: * a review of the products, their life cycles, how they stack up in terms of price and performance * Financial review for each product: X5, X6, and X7 – sales, costs, profitability, prices, unit margins, etc. * Market review: New Sales, repeat Sales, Market Saturation, etc. * Propose an alternate strategy: a general idea of how you might do better with these products: what pricing and R&D allocations, etc. would you have put in place over the last four years, 2006 – 2009. Assignment: Analyze the results of Joe Schmoe's decisions and then write the report that Sally is requesting. Run the simulation of the Handheld Corporation using the default decisions. Access the simulation site (Click here) and choose Demo. Collect the data for each year (or you can downoad a copy of it - see below.) Assignment Expectations: The report should be thorough. And you should Make a Case for your proposed strategy using financial analysis and relevant theories. Include any references that you use regarding data analysis and theories. Turn in the 4 to 6 page paper at the end of this module. To help you out with this first SLP, you can download Joe Schmoe's Results. There are two different formats: Data in Excel - Download this Excel spreadsheet with all of the data for the results of Joe Schmoe's Strategy from the Handheld Corp., 2004 - 2009, including financials and marketing data. Use heading and subheadings throughout paper for ease of reading and allowing easy following of paper

Essay Sample Content Preview:

Running head: Product lifecycle
Product lifecycle
Name
University
Lecturer
Date
Products’ Lifecycle
Review
The progress and sequence of stages from the introduction to growth and eventually to maturity defines a products lifecycle. This sequence is associated with changes in the marketing situation, marketing strategy and marketing mix (QuickMBA). During the sequence the products revenue and profits vary and the trends can be illustrated in a graph.
In the introduction stage, the business would seek to build product awareness and develop a market for the product. To achieve this, the business sets up various strategies. For example, product branding and quality level is established, intellectual property protection such as patents and trademarks are obtained. The pricing is set relatively low to build market share rapidly, or high skim pricing is set to recover development costs. Furthermore the distribution of the good is selective in order to allow the consumers to accept the good.
During the growth stage the products quality is maintained and additional support services factored in to increase market share. The prices remain fairly constant as the brand enjoys increasing demand and with little competition. The distribution channels are widened as the demand increases and more customers accept the product. In fact, in this stage promotion is aimed at broader audience.
When the maturity stage is attained, the strong growth in sales declines. The product may start experiencing competition from similar products. The primary objective remains s to defend the market while at the same time makes profit (William, 1997). The product begins to experience lower prices due to competition. The distribution of the product is intensified and incentives may be offered to encourage preference over competing products. The product promotion strategy changes to product differentiation. Finally when a product is in the decline stage the sales begin to decline.
The Handhelds’ Products Lifecycle
In regard to the three handheld products X5, X6 and X7 the trend in the market as analyzed for the five year period can be to deduce the stage in their product lifecycle. In the year 2005, the X5 Handheld had a market saturation of about 83%, sales volume of about 55%, high profits and good economic value. All these aspects depreciated over the time with market saturation falling to only 5%, sales volume falling to -33% and profits going as low -483% by the year 2009. This is an indication that the product is losing its marketability and appropriate measures needs to be initiated.The X6 handheld had a market saturation of 93%, sales volume of 79% and profits of 0.529 in the year 2005. However, this has as well dropped drastically in the year 2009, with the market saturation of only 20%, sales volume of -52% and a negative profit of 30%.
From the above analysis the X5 and X6 handheld could be in the declining stage in the product cycle. Their reduction in sales and market share could be due to advancement of new competitive products (William, 1997). It could as well be due to high prices with less value on the products which act as a turn off for the customers.
The X7 handheld had a low market saturation of only 48%, sales volume of 46% and profit value of -0.702 by the year 2005. However it has managed to maintain its market saturation at 44%, sales declined marginally to 39% while profits short up to 21%. This indicates that the product is at maturity stage where m...

Updated on January 26, 2024

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