Product Life Cycle Is the Different Stages

Product life cycle is the different stages of a product's life. The stages are introduction, growth, maturity and decline (QuickMBA, 2010). The marketing decisions will vary depending on which stage of the life cycle the product is in. The self-driving car will be in the introductory life cycle phase when it is launched. During this stage a number of things occur. The brand must be developed and introduced to the market. The distribution strategy must be determined. Promotion should be aimed at early adopters during this phase. In addition, the pricing structure may incorporate elements of either skimming or penetration pricing (QuickMBA, 2010).

The self-driving car is expected to move slowly through the introduction stage of the product life cycle into the growth stage. The reason the pace of this movement is expected to be slow relates to the fact that the technology is revolutionary. Consumer acceptance of the technology will have a major impact on the pace at which the self-driving car moves through the product life cycle. Typically, the product life cycle for new technology is rapid, because technology changes so quickly (eHow, 2011). This is going to be true to some extent with the self-driving car in that the iterations (models) will progress quickly, with a new one introduced each year. In automobiles, however, each model year is not viewed as a new product, but as a product that matures and builds on itself year over year. The self-driving car is expected to take 2-3 years to become established among early adopters. One reason is buyer skepticism. The product has merit, but consumers are accustomed to driving their own cars, so are expected to be somewhat reluctant to make the switch. The other reason is that new car purchases are only made every few years for most consumers. As a result of this, many early adopters who are interested will not make their purchase for 2-3 years simply because they are not in a position to buy a new car immediately.

The product life cycle will affect the marketing of the self-driving car in a couple of key ways. The first is that the price point will be impacted. The cost of a car is strongly related to the per-unit cost of production. The more cars are sold, the cheaper than car is to produce. During the introduction phase, there will be no economies of scale on the self-driving technology. As a result, the cost of the car will need to be high to compensate for that. This is common in emerging technologies and many popular technologies today went through the same pricing pattern.

The product life-cycle will also impact the distribution channels. Ford distributes through third-party dealers with a tied relationship with Ford. Because the marketing of the self-driving car will initially require a significant investment in salesperson training and a greater investment in training the consumers how to use the self-driving car, only a handful of large, well-financed dealers -- mostly in major cities -- will have the car. As it moves into the growth stage of the life cycle, more dealers will be added. By the time the self-driving car reaches the maturity stage, the additional training cost for dealers will be minimal, and this should allow Ford to expand distribution to its full dealer network, including overseas.