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Product Life Cycle Of Ipod Essay

1715 words - 7 pages

Individually written essay evaluating the role and application of an analytical model within the marketing planning process to support effevtive marketing decision making.

Ipod
The Prouct Life Cycle (PLC) signifies 4 common factors products have in common; 1. They have a limited lifespan; 2. Their sales pass through a number of distinct stages, each of which has different characteristics, challenges, and opportunities; 3 Their profits are not static but increase and decrease through these stages; and 4. The financial, human resource, manufacturing, marketing and purchasing strategies that products require at each stage in the life cycle varies (Kotler and Keller, 2006). A products life ...view middle of the document...

In 2005 iPod held 33%, 2006 40% and 2007 35% of Apples total revenue. It can be seen that the percentage of total revenue is declining, and this is a concerning factor today. Since 2008 when Ipod sales peaked, growth of the iPod has declined and vastly slowed (appendix 1). This could be due to the release of the iPhone in June 2007 which encorporates all functions of the iPod, but with additional features, such as phone calling facilities and texts, thus pointing towards the iPod entering the maturity stage of the product life cycle. However this demonstrates a limitation of the PLC as the only indication we have to suggest iPod entering maturity are the sales figures, and it is said that a decrease in sales doesn't always mean a transition of stages in the PLC.
The first iPod was introduced to the market on the 10/11/2001 with a 5GB harddrive at $399. Thus, the iPod has entered the first stage of the PLC. Between the lauch date and 31/12/2001 125,000 iPods were sold, however the high cost, due to the price skimming technique used wasn't a huge discouraging factor, due to the iPod being a new development and with few competitors Apple's high price soon only affected price sensitive customers. Apple targeted innovators as the iPod was the first mp3 device of its kind, and with very few competitors, Apple was the initiator of a new generation of portable music devices, which over the years has been highly benificial as the iPod has a huge consumer base. As with most products, during the introductory stage, profits at first were negative due to such high costs of production and expensive forms of promotion to raise customer awareness of the new technology(Kotler and Armstrong ,1996.) 14 Months after the iPod was lauched, Steve Jobs former CEO and founder of Apple, annouced more than 600,000 iPods had been sold -evidence that the iPod progressed rapidly into the growth stage of the PLC. Further to this, the 2003 high retail season between october and december saw more than 730,000 iPods sold, equating to thus over 2million units to be sold since its release.
Appendix 1, allows us to immediatly acknowledge the vast increase in iPod sales, with a peak in 2008 of 54,828,000 being sold. However the PLC doesn't show the redesigns of the iPod, and the 4 different types of product in the family - this therefore generalises sales, and does not seperate each variation of iPod as a seperate product. The BCG, which shows market share, growth rate and cash flow helps to analyse a product portfolio and helps guide informed decision making in regard to possible marketing strategys. This is of use to Apple to highlight Apples market share, as their product portfolio is highly successful, demonstrated by having 4 variations of the same product - the iPod, as well as the most in demand mobile phone - the iPhone, the top rated tablet- the iPad, the highly successful variety of Macbook laptops and iMac desktop computers. The BCG would highlight Apples market share...

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