Market leadership in the 3G market
A Hutchison 3G case study

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Page 2: The Product Life Cycle

the product life cycle

Products go through a life cycle:

  • When a new product is introduced to the market, consumers may have little awareness. Therefore, it is important to use promotional activity to give advice about the product's benefits.
  • The next stage is growth. During this period more people find out about the product and purchase it.
  • Finally is a stage of maturity when there is little expansion and a product may go into decline.

The typical life cycle of a product can be illustrated as above. The sales performance rises steadily from zero (when the product is introduced to the market).

The mobile phone market fits this pattern.

what people are useing now

Relationship between the life cycle and sales

Initially the product will grow and flourish. However, as new competitors come into the market and as excitement about the product reduces, a new stage in the life cycle stage is reached, called maturity. If the product is not handled carefully at this stage we may see the saturation of the market and interest in the product or services begins to decline. At each stage there is a close relationship between sales and profits so that as organisations or brands go into decline, their profitability decreases. To prolong the life cycle of a brand or product, an organisation needs to use skilful marketing techniques to inject new life into the product.

Maintaining a product's life

A product's life cycle may last for a few months or for more than a century. It all depends on how good the product is originally, how easy it is for competitors to emerge, and how good a firm is at keeping its own product relevant and attractive to consumers. Hutchison Whampoa, the company that owns 3, has led the growth of the global 3G market. It has invested heavily in new technology and provides the most comprehensive network for 3G communications.

Hutchison 3G | Market leadership in the 3G market