Product Life Cycle of Nokia Nseries Mobile Phones Essay Example

then exposed to target customers via test markets.

Those products that survive the test market are then introduced into a real marketplace and the introduction phase of the product begins. During the product development phase, sales are zero and revenues are negative. The Introduction Stage Prior to 2005, Nokia was making conventional phones mainly for texting and voice calls. The internet ages led to the necessity of a gadget that can be used to access the internet. To fill this gap, the N series was born. The first set of N series phones comprised of N70, N90 and N91.

All were introduced at the same time, having slight variations in their features. Like any product at this stage, huge investments had to be made to get the product into the market with only a small percentage of the investment being realized. Even though the N70 was more successful than the other two models, the total sales figures showed an overall increase. The growth phase offers the satisfaction of knowing that the product is growing in the marketplace. This is a suitable time to focus on increasing the market share.

At the start of the 2005 launch, the N-series had wide acceptability resulting in a growth rate of 35. 5% of the sales volume. The Maturity Stage The maturity of this series came at the start of 2006. More people were now aware of the different useful capabilities of the Nokia N-series mobile phones. The market share became high, but the rate of increase in the sales volume declined as the product is now getting to the saturation stage mentioned in the earlier sections of this report. It is

usual to find other competitors at this stage.

Pricing and discount campaigns are employed in relation to the competition. Promotion and advertising shift from the target of getting new customers, to the target of product differentiation in terms of quality and reliability. The Decline Stage Product Life Cycle decline is accompanied by a decline in market sales. It is sometimes difficult to recognize since marketing personnel is usually too optimistic due to big product success coming from the maturity phase. The decline of the Nokia Nseries(N70, N90 and N91) started in 2006. Competitors such as Samsung came up with very good internet-enabled phones. Nokia did not wait to be cannibalized by these new products but went back to the drawing board to come up with the all-powerful N95 which was a grand success till the arrival of apple’s i-phone. The withdrawal stage is the last step in the life of a product. This is the time to start withdrawing variations of the product from the market that are weak in their market position. Advantages of the Product Life Cycle The product life cycle graph enables the determination of how profitable the product is.

The product’s position on the graph allows decisions to be made for optimum return on investment. Marketing advantage is gained from a correct business assessment of the stage of the product. Production cost is reduced by achieving economy of scale of production. This in turn wins more customers making the product acquire the desirable growth phase status. Therefore with the product life cycle, knowing what to do at each stage can mean the difference between profits and losses.

According to Thomas (1994), products are not

living things, hence the biological metaphor, life cycle, is entirely misleading. The definition of the four stages of the product life cycle is not distinct. It is not possible at any moment in time to determine the product’s actual position. Therefore, using this planning tool may not be accurate. Also, factors such as recessions or population explosions could make predictions based on product life cycle unreliable. Based on the above criticisms, Wood (1990) predicted the end of the Product Life Cycle.

References

1. Buzzell, R. D. (1966), “Competitive Behaviour and Product Life Cycles. Proceedings of the 1966 World Congress, Chicago, American Marketing Association, p50.
2. Baker, M. , Hart,S. , Product Strategy and Management, 2nd Edition, Pearson Education Ltd, 2007
3. http://press. nokia. com/PR/200504/992467_5. htm (accessed on 05/11/2010)
4. Scheuing, E. E. (1974), New Product Management, Hinsdale ,IL, Dryden Press
5. William D. & McCarthy J. E. Product Life Cycle: “Essentials of Marketing”, Richard
6. D. Irwin Company, 1997.
7. Wood, L. (1990). The End of the Product Life Cycle. Journal of Marketing Management, 6 (2), Autumn Total Word Count:998