I’m trying to learn for my Marketing class and I’m stuck. Can you help?
Week 5 Discussion 2
“Pricing for a Lifetime” Please respond to the following:
- Assess the challenges of adapting pricing strategy over a product’s life cycle and suggest ways those challenges may be addressed. Provide specific examples to support your response.
- Pick a product with which you are familiar that is currently in the mature stage of the product life cycle. Summarize the pricing strategy used during the first three phases of the product’s life cycle.
AND RESPOND TO THESE POSTS:
RE: Week 5 Discussion 2
A product that I think that is currently in the mature stage of the product life cycle is the DVDs. Invented in 1995, DVDs were invented to store files as well as video programs and were watched globally. Even though the DVD has established a strong market share, they still had to deal with the challenges from other technology. Flash drives, the cloud and streaming services have beat out the DVD thus, placing it in the maturity stage. As a part of film home sales, DVDs are classified as a sale item meaning, they are not factored into the pricing strategy until the growth stage, when profits are meant to double on what films have already made.
Challenges with the DVD life cycle include predictability. When the DVD was created over 30years ago, inventors didn’t know when or how long it would remain the standard. They also weren’t aware of what product or innovations would be next. The real-life solution was the invention of the blue ray DVD. Unfortunately, that was a little too late because streaming services have since taken over.
RE: Week 5 Discussion 2
Just like people, most products go through several distinct phases during their lifetime. Once products are introduced, they’ll go through periods of growth, maturity and eventual decline. That’s referred to as the product life cycle and understanding how it works can guide you in setting the price of your products and in tweaking your business strategy.
It is easier to understand the complexity of the product life cycle in the context of a real-life example. The total sales of Apple’s iPod across all models follow a classic product life-cycle curve. One strategy that Apple employed to increase growth was to introduce new models often. The new models had similar functions but offered significantly different styling. This drove multiple sales to the same buyer. A buyer was less likely to say, “I already have an iPod,” than to say, “I have an iPod Classic, but I want an iPod Nano.” From the initial launch in October 2002 through 2007, Apple introduced five major iPod models, with multiple versions of each. In September of 2008 and 2010, Apple released new versions of three different iPod models at the same time. Throughout the growth period Apple chose not to sell old versions of new devices. Once the company introduced the third generation of the iPod Nano, it stopped selling new second-generation iPod Nanos (though it did still offer refurbished versions of the older products). This allowed the company to quickly make the older versions obsolete, which drove new sales and reduced the ongoing support costs for older models.