Product Lifecycles &

Adoption Curve

Presented by
Bob Perry
 The Entrepreneur
• One who:
–organizes,
–manages, and
–assumes the risks of a
business or enterprise

• Risk Takers…Market Finders

The Marketing Mix

Product Price

C
Customers

Place Promo
 Product
The needs satisfying agent that is offered.
• Convenience Goods
–Staples
–Impulse
–Emergency
• Shopping Goods
–Homogeneous Goods
–Heterogeneous Goods
–Specialty Goods
 Product Life Cycle
• Products (like customers) have a life cycle.
Sometimes these life cycles can be short,
but often the life cycle of a product can
be longer.
• Generally, a product will go through four
stages during its life cycle:
– Introduction/Development (Birth)
– Growth
– Maturity
– Decline (Death)
 Product Life Cycle
Development & Growth Maturity Decline
Introduction
Sales / Profits
 Introduction Stage
Typical Characteristics

• Sales grow slowly • Limited product models

• Few if any established • Little competition
customers • High Promotional Cost
• Frequent product • Focus is on creating
modification awareness of product
• Skimming price strategy • Promotion strategies
• High failure rate need to create demand
• Profit minimal to • Intensive personal
negative selling to distribution
channel common
 Growth Stage
Typical Characteristics

• Sales grow at an • Large companies may

increasing rate acquire smaller,
• More customers are pioneering firms
established • Heavier brand
• Profits increase as sales advertising and focus
increase with more on differentiation
limited competition between brands
• Prices start falling as • Economies of scale start
competitors are added to influence pricing
 Maturity Stage
Typical Characteristics

• Sales continue to increase • Emphasis on product

as the market place grows style more than just
with adapters function
• Profit margins begin to • Marginal competitors
shrink as more begin to drop out of
competitors enter market marketplace
place • Heavy promotion to
• Product lines are widened maintain market share
or extended • Maturity stage can last for
an extended period of
time.
 Decline Stage
Typical Characteristics

• Sales decline or • Some specialty firms

disappear may stay in the market
• Sometimes new for a long time as
products with more competition leaves the
utility replace older marketplace.
products • Sales are generally low
• Falling demand forces and the only way to
many and eventually survive is to find niches
most competitors out of for the product that can
the marketplace support higher pricing
 Adoption Curve
• The Adoption Curve is adapted from a Everett
Rogers Diffusion of Innovations and is used to
show how quickly differing consumer groups
adopt new products
• The Adoption Curve segments include:
– Innovators (3% to 5%)
– Early Adopters (10% to 15%)
– Early Majority (about 34%)
– Late Majority (about 34%)
– Laggards (5% to 16%)
Adoption Curve is basically a
statistical Bell Curve
 Innovators
• Do not rely on norms or past standards
• First to adopt any new product, service, or idea.
• Tend to be younger with higher social or
economic status
• Rely less on group norms and like to get their
information from technical sources and experts.
• Generally 3% to 5% of the population
 Early Adopters
• Relatively high is social status and often
opinion leaders.
• Typically younger, more mobile, and more
creative than majority
• Rely on input from innovators and technical
sales
 Early Majority
• Early Majority consumers collect more
information about the product and will weigh the
pros and cons before they make a decision.
• They listen to their opinion leaders and will rely
on their groups’ opinions instead of forming them
for themselves.
• Early Majority group members are positioned
between the earlier and later adopters and are
deliberate in their data collection process.
 Late Majority
• Late Majority consumers adopt a new product
mainly because their friends have all adopted
them and they feel the need to conform.
• This group is typically older and may have
below average income and social status.
• They listen to word-of-mouth communication
over mass media, since they trust their friends
more.
 Laggards
• Laggards do not rely on group norms and values, just like
Innovators, which makes them difficult to reach.
• Their past heavily influences their current decision process.
• By the time Laggards adopt an innovation it has been
possibly outmoded and replaced by something new and
flashy.
• They are extremely suspicious and feel alienated from a
rapidly changing society.
• This group probably bought their first black-and-white TV
after color television was already dominantly used.
• Marketers and advertisers tend to ignore Laggards since
they are not motivated by advertising or personal selling
and will only purchase a new product when they absolutely
have to.
 Adoption Curve
Innovators Early Adopters Early Majority Late Majority Laggards

90%
Percent of adoption

50%

20%

5%
Time
 Product Life Cycle
Development & Growth Maturity Decline
Introduction

Moccasins Tablets Shoes Crocs

Oculus Rift Microsoft Surface Pro MS Windows Atari

Cassette players
VCR Players

Vinyl Records