short note on product elimination
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Definition: Product Elimination
Product elimination is the decision to drop a product from the portfolio based on its poor market performance. The market demand for such products has been dipped to none and hence product elimination or closure is carried out. Product elimination can also mean that only product under an umbrella brand needs to be stopped and not the entire portfolio.
Product elimination:
Product elimination is the decision to drop a product from the portfolio based on its poor market performance. The market demand for such products has been dipped to none and hence product elimination or closure is carried out.
A product life cycle has essentially 4 stages- Development, Growth, Mature and Decline. In the development stage, the product looks to find a place in the market, acquire new customers and produce brand awareness. In the growth phase, the product marks a substantial growth in demand, builds a solid customer base and generates healthy revenue for the company. In the mature phase, the market is nearly saturated and the demand for the product sees no more growth. Revenue collection may start to tumble. In the decline phase, the product loses market share and demand and is making losses. It is in this phase that the Product elimination or product deletion is done.
Apple dropped its once upon a time market leading product- the ipod because with the advent of smartphones, the market demand for ipod declined suddenly. Because Apple ipod was doing well with high market share, ipod found itself in the harvest phase. But as demand declined further and so was the share of Apple, it moved into the dog phase and was subsequently eliminated. This is an example of product elimination.