Product Life Cycle: DVD Vs Flat Screen TV

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Product Life Cycle is the length of time start from when the product is introduced to the market until the market decline the product due to various reasons (Kopp, 2020).

There are four stages in the Product Life Cycle that are:

1. Introduction –This is the most critical stage since in this stage the product requires a lot of modifications and promotion.
2. Growth — The demand increase along with sales. Branding plays an important part since they need to differentiate their product to gain competitive advantages.
3. Maturity –Profit reaches its peak. The company brings variations of the products.
4. Decline –The product lose market share, sales and profits decreasing.

For this article, the two products chosen are DVD and Flat Screen TV.

This article identifies the product life cycle stages of the chosen products and provides explanations of each product using the empirical findings from the published journals. Kennedy’s (2019) article explores the life cycle of Flat Screen TV and how the TV industry maintain its maturity position for years. Koplan’s (2006) article shares why DVD has reached its decline stage. Ahmadi’s (2019) journal will support findings on marketing strategies related to product life cycle.

DVD — Decline Stage

The movie studios recognized the success of DVD, when DVD sales of movies exceed the profit they get from the tickets sold in theaters. However, according to the data from The Digital Entertainment Group, in 2005 the shipment of DVD movies and TV shows fell into 9% /year compared to 50% growth in 2003 and 2004.

According to Koplan’s (2006) findings, the rapid deceleration in DVD sales growth happened due to illegal piracy (torrents), video streaming services such as Youtube and Twitch, monthly rent movie subscription services such as Netflix, Disney Plus, and Amazon Prime.

Effect on The Company’s Marketing Strategies

Since 2006, the DVD industry has been lowering its price offering. Nevertheless, despite the tremendous effort done by the industry, DVD sales continue to fall as the customers move to the new technology.

1. Price — As mentioned above, the DVD industry tried to lower the price but this seems not the right action. The market now shrinks to the faithful conservative movie fans. The company could target this small market without lowering its price too much.
2. Advertising — Offering campaigns such as selling celebrity-signed DVD movies can be one of the effective advertising methods.
3. Distribution Channels — The industry can work together with movie theaters to create an event where movie fans can buy DVDs after they watch the premiere.

Flat Screen TV — Maturity Stage

According to Kennedy (2019), Flat Screen TV has been at a mature point for a period. Flat Screen TVs have been part of the popular consumer electronic ecosystem for decades. This is because TV manufacturers have been able to innovate adapt to the new technology. Smart Function, 3D, Ultra HD, and so on were the proofs of their efforts to keep up with the latest technology.

Effect on The Company’s Marketing Strategies

Since the TV industry has been matured for so long, the TV industry mostly spent their resource on innovation to catch up with customers’ needs and the technology available.

1. Price — The TV manufacturers can just keep their price as it is. However to gain a competitive advantage, they need to: reposition their product, build strong branding, and add new features to their current product. (Ahmadi, 2019)
2. Advertising — Conventional advertising methods such as TV commercials, sponsoring sports events, and promotional events at shopping malls are still effective for matured markets such as TV.
3. Distribution Channels — TV manufacturers usually adopt a vertical marketing system that consists of manufacturers, wholesalers, and retailers. Online marketing channel such as Amazon.com is another one of great methods to distribute the product.

Conclusion

In terms of consumers, the DVD industry needs to keep only the loyal consumers (movie fans) while the TV manufacturers can market their product globally to seek new users. The competition in the two industries also has different levels. TV manufacturers need to pay more attention to their competitors more than DVD manufacturers should. The TV industry can survive for decades due to its tremendous efforts to keep up with the latest technology. Meanwhile, the DVD industry is not able to keep up due to piracy, online streaming services, and movie subscription service (Netflix, Amazon prime, or Disney Plus).

The brand managers need to understand in what stage their products are to be able to forecast future sales and adjust their marketing strategies with the real market condition in order to prolong their product life cycle (Ahmadi, 2019).

References

Principles of marketing. (2015). University of Minnesota Libraries Publishing.

Kopp, C. M. (2020, May 11). Product life cycle. Investopedia. https://www.investopedia.com/terms/p/product-life-cycle.asp

Product life cycle stages and examples. (n.d.). Made for recurring payments | GoCardless. https://gocardless.com/guides/posts/product-life-cycle-stages-examples/#the-four-product-life-cycle-stages

Kennedy, D. (2019, June 11). A true story about product life cycles, TVs, and running. gap intelligence. https://www.gapintelligence.com/blog/a-true-story-about-product-life-cycles-tvs-and-running/

Coplan, J. (2006, April 3). Diagnosing the DVD disappointment: A life cycle view. ResearchGate. https://www.researchgate.net/publication/251310498_Diagnosing_the_DVD_Disappointment_A_Life_Cycle_View

Ahmadi, F. (2019). Marketing strategies in the product life cycle. UCT JOURNAL OF MANAGEMENT AND ACCOUNTING STUDIES, (02). https://doi.org/10.24200/jmas.vol7iss02pp32-36

Note:
This article is written based on University of The People Marketing Management (BUS 5112) written assignment by Fristy Tania in September 2021