Manufacturing Technologies - Assignment 1 Example | Topics and Well Written Essays - 2000 words

Manufacturing Technologies - 1 - Assignment Example 382). In the present technologically changing environment, the manufacturers of goods and services need to improve on their current products to survive. Hence demand forecasting is crucial for the companies to make their product satisfy the needs of the consumer. Hence the concept of Product life cycle is very important. It is a tool through which we can analyse the demand within an industry. Through this PLC, it is possible to identify when a product needs to be replaced to make way for another product so that the manufacturer can make decision of introducing another new product replacing the existing one so that the manufacturer can earn profit (Gillies, 1996, p. 127). According to PLC theory a firm in any industry can predict the shift of product from one stage to another and hence will be able to adopt proper marketing-mix polices like when to replace a product with newer improved version to meet the expectations of the consumers. In 2004, the replacement purchases accounted for 55% of the digital camera sales, 63% of cell phones sales and 82% of computer sales. Product Life Cycle A product life cycle shows the sales pattern a product over a period of time. The time span begins with the period of introduction and ends with replacement of the product. Basic Stages in the Product Life Cycle Figure 1: Product Life Cycle Introduction / Development stage. Growth Stage Maturity Stage Decline Stage Here we will concentrate mainly on the Maturity Stage. It is here where the manufacturer has to get rid of old products and come out with strategies to rebrand the old products or manufacture and altogether new products in their portfolio of products. In the Maturity stage the product faces lot of market competitors and hence the profit declines as percentage of the sales (Grieves, 2006, p. 23). Hence companies when facing this has to come up with strategies to preserve their customer base and achieve profitability. Automobile Industry Figure 2: PLC of Car Industry In a utomobile industry the car manufacturers needs to replace their old cars with new cars to meet the demand and needs of the customers. Automobile industry faces extraordinary level of competition, which make the carmakers produce cars with a higher degree of differentiation (Kumar and Krob, 2006, p. 114). This makes the demand more elastic in nature and hence the carmakers are face with making new cars. In the 1970s most of the western car makers were in the saturation stages. Like in USA and Europe there was a demand of high motorization rate i.e. more car per person and hence the car manufactures had to make new products. The consumer’s decision to purchase a new car is based primarily on the search for a better car with more innovative solutions than ever before (Jones and Mathew, 2008, p. 384). Hence to retain the old customers and get new ones, the carmakers must offer new or better products to the customers at any time the customers decide. Car makers know that any delay in the product – innovation across the product life cycle will result in potential loss of consumer base. Whenever a car manufacturer comes out with newer car model, large manufacturers have economies of scale so that they can easily make the use of their resources and manufacture the new cars at a much reduced cost. Sometimes re launching of new car is not the only option. Car manufacturers sometimes decide to rebrand their