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IIPM-SS-09/11
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Product Life Cycle of Compact Disk
Industrial Product Life-Cycles
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Product Life Cycle of Compact Disk
viable. These external factors include shifting consumer requirements,
industry-wide technological advances, and an evolving state of
competition with a company’s market rivals. The fluctuating patterns of
a life-cycle indicate that a different marketing and product
development approach may be needed for each stage of the cycle.
Understanding life-cycle concepts can aid in long-term planning for a
new product, as well as raising awareness of the competitive landscape
and estimating the impact that changing conditions can have on
profitability.
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Product Life Cycle of Compact Disk
The Introductory Stage
After being introduced into the market, a new industrial product will
yield varying degrees of acceptance. Some products may find
acceptance soon after release, while others may take longer to develop
a customer base. One of the reasons for this disparity involves the skill
set required to make full use of a new product. Goods that need
relatively little training and do not obligate users to learn new skills or
refine existing ones typically find market share more rapidly than
complex products. A company that introduces a product requiring a
high degree of learning and expects a relatively low rate of acceptance
can focus on market development strategies to help build consumer
appeal. Conversely, products with a low learning curve and a quick route
toward acceptance may need a marketing strategy designed to offset
rival products, as competition at these levels tends to be higher.
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Product Life Cycle of Compact Disk
The maturity stage of a life-cycle is characterized by an increase in
the number of market competitors and a corresponding decline in
profit growth as a percentage of sales. To compensate for the level of
saturation that occurs during this phase, the product development
strategy revolves around entering new markets, often through exports.
It may also be helpful to increase efforts to satisfy existing
customers in order to preserve the customer base. Reducing spending
on marketing and production can help maintain profit margins.
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Product Life Cycle of Compact Disk
Technology Adoption Lifecycle
>
The impact of this adoption process and the manufacturing economies
of scale are significant determinant of technology product prices.
The early adopters pay less than the innovators, as factories get built
to mass produce chips or tape transport mechanisms or cell phone
keypads. What was a nearly custom made product becomes a merely
limited-production, high-end one. Where the innovators paid for the
R&D, the early adopters paid for the fabs and factories to be built.
The early majority doesn't get the use of the product for the first
few years, but they get a big price benefit of manufacturing economies
of scale. Mass production of components bring prices down; successful
products attract competition to the space, and soon more
manufacturers are cranking out more units. Through competition,
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Product Life Cycle of Compact Disk
prices begin dropping faster and faster. The late majority gets even
cheaper prices. Consider the laggards and the VCR today -- they cost
about $29 each.
Compare the top and bottom quintiles: Who is consuming fatty, high
carb foods, and who is eating lots of protein, fresh fruits and
vegetables? What about medical care? Do they have reliable access to
any sort of family physician, regular check ups, doctor visits, ongoing
treatments, preventative care -- or is their medical consumption on an
emergency room basis? What is the quality of their housing like --
safe neighborhoods, with access to good schools? Or something less
desirable?
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Product Life Cycle of Compact Disk
PRODUCT LIFE CYCLE OF COMPACT DISK
Introduction
Compact disc technology is one of the fastest growing industries of all time. Compact
discs became popular in the early 80’s due to its ability to offer increased audio performance
over traditional magnetic recording media. In 1983 over 30,000 players and 800,000 discs were
sold. By 1990, this number had grown to a staggering 9.2 million players in the U. S., and close
to 1 billion discs worldwide. In 2004, the annual worldwide sales of CD-Audio, CD-ROM, and
CD-R reached about 30 billion. Today, Sony DADC is the leader in the industry and produces
about 410 CDs per day and ships up to 6.4 million discs daily.
Compact disks are majority used for storing music. The study concentrated on life cycle
of Music CDs from the perspective of manufacturing process needed.
The unit sales of all the memory devices used to store the music are plotted in graph
shown in Figure 1. From the figure we can identify that a development of new product is threat
for existence of the present products from history it is clear the product growth of castes
vanished Vinyl storage devices. Then cassettes where replaced by compact disks.
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Product Life Cycle of Compact Disk
Product life cycle of C.D
The compact disk product life or any products life contains five major stages. They are
1. Product development
2. Product introduction
3. Product growth
4. Product maturity
5. Product decline
Introduction Phase
The introduction phase of a product includes the product launch with its requirements to
getting it launch in such a way so that it will have maximum impact at the moment of sale.
Growth Phase
The growth phase offers the satisfaction of seeing the product take-off in the marketplace.
This is the appropriate timing to focus on increasing the market share
Maturity Phase
When the market becomes saturated with variations of the basic product, and all
competitors are represented in terms of an alternative product, the maturity phase arrives
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Product Life Cycle of Compact Disk
Decline Phase
The compact disk presently is in Decline stage. In this stage market will see drastically
down words change in the unit sales. This happens due to new product entry, obsolete of
technology and cost factors. In music storable compact disk industry is in decline phase. The
existence of product will be for very less amount of period .The product is phasing rivalry in its
market with the other storage devices.
• DVD
Digital video disk whish has same size as compact disk but can store 5 time more then
compact disks. Product life is more but ir requires a special devices to read like DVD
player which is now stored as standard features in most of the laptops , desktops and
music systems.
• Pen drives
Pen drives are USB accessed small devices which have capacity same from 1 GB
16GB.Very easy to carry. But the disadvantage is cost in the market is 125/GB of
memory which is huge. The device can be written and erased n number of times.
• USB hard disk
Huge capacity device from 120 to 320 GB accessed through computers. Cost is more and
need of USB protocol is must in Music system. Which is introduced in market recently.
• IPods
Music storage devices as well as music players the capacity is choice.
• Internet (Direct download from)
Music can be downloaded directly from the web sites.
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Product Life Cycle of Compact Disk
3.3 BCG matrix for different storing devices
The BCG matrix is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1970 to help corporations with analyzing their business units or product
lines. This helps the company allocate resources and is used as an analytical tool in brand
marketing, product management, strategic management, and portfolio analysis.[2.3] Attributes of
BCG are
• Relative market share
• Versus market growth rate
Data source: From the news articles from websites. (In Indian context)
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Product Life Cycle of Compact Disk
3.3.1 BCG analysis result
Based on data from Table 1 a BCG matrix is obtained as shown in Figure 3. From the
available result BCG matrix shows different products are in different stages. Products fall in
following categories
Dog Business
In this category business low market share ,slow-growing industry. The product are may be in
introduction or decline stage. They depress a profitable company's return on assets ratio, used by
many investors to judge how well a company is being managed. The best way to manage is to
sell of or to employee harvesting strategy. The business products fall in this category are
• USB hard disk
• Compact Disk
Cash Cows
In this category business are with high market share in a slow-growing industry. These units
typically generate cash in excess of the amount of cash needed to maintain the business. The
business products fall in this category are
Digital video disk
Question marks
These product businesses are growing rapidly and thus consume large amounts of cash, but
because they have low market shares they do not generate much cash. The result is a large net
cash consumption. By investing and marketing the products can be moved to star category. The
business products fall in this category are
• Internet downloading
Stars
The business with a high market share in a fast-growing industry. The hope is that stars become
the next cash cows. The business products fall in this category are
• Pen drives
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Product Life Cycle of Compact Disk
• Mobiles
3.4 Manufacturing system
F
i g
u r
e 4
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Product Life Cycle of Compact Disk
writer. The glass master is a positive image of the desired CD surface (with the desired
microscopic pits and lands). After testing, it is used to make a die by pressing it against a metal
disc.
The die is a negative image of the glass master: several are typically made, depending on
the number of pressing mills that are to be making the CD. The die then goes into a press and the
physical image is imposed onto the blank CD, leaving a final positive image on the disc. A small
amount of lacquer is then applied as a ring around the center of the disc, and fast spinning
spreads it evenly over the surface. Edge protection lacquer is also applied before the disc is
finished. The disc can then be printed and packed.
Manufactured CDs that are sold in stores are sealed via a process called "polywrapping"
or shrink wrapping[2.4 ]
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Product Life Cycle of Compact Disk
from the production of one disc to another to accommodate the vast number of artists, albums,
and rapid and increased variation of the consumer’s taste.
The other major concern is cost. Because a compact disc is a consumer’s product, prices
must be kept low to stimulate demand. Therefore, it is necessary to avoid costly, exotic, and
inefficient production practices. The Standard Stamper Injection Molding process is the method
which is used most commonly used in the production of the compact disc. There are specific
industrial concerns regarding energy used and solid wastes generated from this process as well as
the manufacturing of polycarbonate.
Due to change in customer expectations and new products growth in the industry, by t
analyze the similarities between CD and DVD it is necessary to setup High speed line type
flexible production system. Flexibility must for the input of materials keeping the
manufacturing methods same.CD and DVD manufacturing process can be standardized the only
flexibility is coating material the production system must be capable of fulfilling this flexibility
issues.Figure 7 is symbolic representation of required production systems.
CD material flow
M M
Product Flow
M= Flexible Machines
3.5 Conclusion
Every product has its own life cycle. To attain the profits it is very necessary to setup the
manufacturing setup based on the future needs. The compact disk study shows these conclusions
Compact disk is in decline stage in product life cycle.
Compact disk is in dog business in BCG matrix.
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Product Life Cycle of Compact Disk
Flexibility in manufacturing system is of great need. Manufacturing more than one
similar product can bring cost to equilibrium.
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Product Life Cycle of Compact Disk
Referencing
5. Vickie S. Durrah,” Life Cycle Assessment of Emissions for Compact Discs”, Parkman
Elementary School, Chicago,2006
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Product Life Cycle of Compact Disk