Product Lifecycles & Adoption Curve

Presented by
Bob Perry

The Entrepreneur
One who:

organizes,
manages, and
assumes the risks of a
business or enterprise

Risk TakersMarket Finders

The Marketing Mix

Product

Price

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

Sales / Profts

Developme
nt &
Introductio
n

Growth

Maturity

Decline

Introduction Stage
Typical Characteristics

Sales grow slowly

Few if any established
customers
Frequent product
modifcation
Skimming price
strategy
High failure rate
Proft minimal to
negative

Limited product models

Little competition
High Promotional Cost
Focus is on creating
awareness of product
Promotion strategies
need to create demand
Intensive personal
selling to distribution
channel common

Growth Stage
Typical Characteristics

Sales grow at an
increasing rate
More customers are
established
Profts increase as
sales increase with
more limited
competition
Prices start falling as
competitors are
added

Large companies
may acquire smaller,
pioneering frms
Heavier brand
advertising and focus
on differentiation
between brands
Economies of scale
start to influence
pricing

Maturity Stage
Typical Characteristics

Sales continue to
increase as the
market place grows
with adapters
Proft margins begin
to shrink as more
competitors enter
market place
Product lines are
widened or extended

Emphasis on product
style more than just
function
Marginal competitors
begin to drop out of
marketplace
Heavy promotion to
maintain market share
Maturity stage can
last for an extended
period of time.

Decline Stage
Typical Characteristics

Sales decline or
disappear
Sometimes new
products with more
utility replace older
products
Falling demand
forces many and
eventually most
competitors out of
the marketplace

Some specialty frms

may stay in the
market for a long time
as competition leaves
the marketplace.
Sales are generally
low and the only way
to survive is to fnd
niches for the product
that can 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 frst 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

Percent of
adoption

90%

50%

20%
5%
Time

Late
Majority

Laggards

Product Life Cycle

Developme
nt &
Introductio
n
Moccasins

Growth

Tablets

Oculus Rift Microsoft Surface Pro

Maturity

Decline

Shoes

Crocs

MS Windows

Atari
Cassette players
VCR Players
Vinyl Records