Management and Product Life Cycle

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Asos.com Question 2
From this case study, Asos.com is the online company that provide fashion stuff to customer through the internet. As we already know that fashion industry are quickly change, depends on trend and time, so, product life cycle is very helpful and useful to help the company making the decision on their products. Especially, to help manager to determine which product should be launch in each time, when they need to start their promotion, or which product need to be on special discount for get rid of the item that is not going well. Product life cycle also help the manager decide their product to ready for the next season. For example, during the winter 2008, Asos.com’s managers have to choose their product and plan how to promote their new collection for summer 2009 already. Understanding the product life cycle also gives ASOS.com managers greater control. • They are able to predict when revenue will flow in and calculate the profitability of product lines. • They can plan the introduction and withdrawal of products. Some product lines will be highly seasonal. Other products such as classic blue jeans will have much longer life cycles and provide regular long-term revenue for the business. Managers therefore need to plan the appropriate type and level of promotion for different products. • They can support products through the entire life cycle. They can plan pricing strategies to extract as much revenue as possible at every stage. For example: - promotional discounts can be used to encourage large numbers of people to purchase a new product when it is launched

- premium pricing may apply to a new limited edition dress
- price reductions are often used at the end of the life cycle when the item is less popular and sales are declining.
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