Cost and Scheduling Basic

Posted: October 17th, 2013

Cost and Scheduling Basic

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Cost and Scheduling Basic

A product life cycle is the process undergone by a product from the introduction stage to the decline stage. This proves that the life of a product is limited and hence maximization of sales should occur during the different stage of the product’s life cycle before its decline (Levitt, 1965). Therefore, a strategic project management should be incorporated to ensure this maximization of profits. In each stage, the product faces different challenges and opportunities that the project management should identify. A marketing project changes throughout the products life cycle to suit the demands of the specific stage of the product. Therefore, project organizational management employs strategies throughout the products lifetime to maximize on the sale of that product (Wideman, 1987). This is identified as a marketing project in relation to a certain product.

In the introduction stage, project management is implemented where the company utilizes different techniques in marketing the product, as the consumers have no idea about its existence. The project operational management at this stage will comprise of the functional team in charge of development, quality assurance and implementation (Day, 1981). The company incurs high costs since they engage in marketing campaigns and the income from the particular product is low since the sales volume is low. The company tries creating a demand base by use of promotions and other marketing strategies hence incorporating the services of the support team in the operation management. As time goes by the product enters the growth stage where the profits realized start growing and the costs incurred are reduced due to bulk production (Levitt, 1965). The company incorporates project management in implementation of changes in marketing campaigns as there is increased awareness of the product from the public but there also is presence of competition hence there is lowering of the product price. This strategy is determined by the project managers to maintain the product preference to the customers where the reduction in the prices is covered by the increase in consumers.

After the finalization of the growth stage, the product enters the maturity stage where the project strategies and techniques have to change to suit the market position of the product. Here the project management will comprise of transitional committees that oversee the transition in marketing techniques to ensure relevance and total performance (Wideman, 1987). At the maturity stage, the product has gained market control hence the sale volumes are at the peak. This results in lowered costs for the company due to the high production volumes resulting in economies of scale. There is saturation in competition for the market so the company’s marketing strategies have to be the best. Here the company engages in techniques such as brand differentiation and diversification in the features of the product in relation to other competing products (Levitt, 1965). The prices are further declined in an attempt to lure customers to remain loyal.

After this stage, the product finally enters the decline stage. Here additional costs in the improvement of the product serve no purpose in increasing the sales level but only decrease the profit. The profitability of the product diminishes and the sales in relation to volume produced declines. The project ends as another one is established to revive the company’s profit creation. The functions of the components of the organization structure will be dependent on the stage of the product life cycle. However, in every stage the project review board will still have the final say on what strategies to be implemented, as they are the major decision makers (Day, 1981).

References

Day, G. (1981) The product life cycle: Analysis and applications issues. Journal of Marketing, vol 45, autumn 1981. Print.

Levitt, T. (1965) Exploit the product life cycle. Harvard Business Review, vol 43, November–December 1965. Print.

Wideman, R. M., Project Management Institute., & PMI Standards Committee. (1987). Project management body of knowledge (PMBOK). Upper Darby, Pa: Project Management Institute. Print.