The product life cycle refers to the stages a product goes through as it exists
ID: 2730835 • Letter: T
Question
The product life cycle refers to the stages a product goes through as it exists in the market from its first introduction to its final withdrawal. Name the 4 stages, describe each one, and give an example for each in regard to health care. Vertical marketing systems can be defined as channels in which the intermediaries are integrated so their functions are performed at the most efficient place within the channel. Name the 3 common forms of vertical marketing systems, and give a brief description on each. Although advertising has become more common in health care, it is still a tactic that generates concern and criticism. The Alliance for Health Care Strategy and Marketing developed a set of voluntary guidelines regarding the concerns and issues that should be considered in health care advertising. List the Health Care Advertising Guidelines.
Explanation / Answer
Life Cycle Costing:
Four stages are as followes:
a) Development Phase: At this stage planning is done to how the whole product is launched. Decisions of sales,pricing,competitors etc are also researched. example - R & D cost, Desigh Cost
b) Introduction Phase: Product is launched. At this stage profits are almost non existent.There is no competitors at this stages. Example - Prmotional cost, capacity cost.
c) Growth and Maturity Phase: At growth phase profit rise rapidly and competiotrs begins to enter in the market. In case of maturity phase sales increases but at a declining rate. Here some firms extend their product lines with new models. Example - Manufacturing cost, Distribution cost, product support cost.
d) Decline/Saturation/Replacement Phase:At this stage there is drop in sales volume, need for product demand disappear. At this time better ans cheaper substitutes are available in the market. Example - Plants reused, sold, scrapped, related cost.
Vertical Marketing System:
Three common forms of Vertical Marketing System (VMS) are: a) Corporate system, b) Contractual system, c) Administered system.
a) Corporate System: A corporate vertical marketing system streamlines the process by bringing all of the elements of the distribution channel, from manufacturing to the stores, under the ownership of a single business. An example for the corporate is Apple who is responsible for doing everything related with their products. Apple Company has place for the designing and also the making of the products. These products that are made by the company are sold in the retailer shops of the company itself. They need not have to depend on any of the other people for the purpose of production or even selling of the products.
b) Contractual System: Under contractual VMS, the pieces of the distribution channel continue to operate as individual entities. This is done for coordinating the overall process that is related with the particular company. A common form of contractual VMS is franchising.
c) Administered System: Administered vertical marketing systems employ neither formal contractual obligation nor corporate ownership of the distribution channel. It has one member from the production as well as the distribution chain, has more dominance and they organize the whole nature that is associated with the vertical marketing system in an informal manner. This is due to the sheer size that is associated with the company. Massive retail chain stores, such as Walmart, often preside over administered vertical marketing systems.
Health care Advertising Guidlines:
a) Advertisements include any notice, circular, report, commentary, pamphlet, label, wrapper or other document, and any announcement made orally or by any means of producing or transmitting light or sound.
b) The information provided in the advertisements must be factually accurate and capable of being substantiated. It must not be exaggerated, false, misleading or deceptive.
c) The authenticity and the accuracy of the information imparted in the advertisements should be verifiable by the Medicine Advertisements Board. The public should not be misled into drawing inaccurate impressions of the ability or services offered by the healthcare facility.
d) The information provided in the advertisements shall be in strict compliance with these set guidelines.
e) Information about advances in medical services and therapeutics is best conducted through the appropriate medical forums and professional publications to avoid the risk of unbalanced and inaccurate reporting.
f) Features or articles that contain elements of advertising of skills or services will be deemed to be promotional in nature and regulated as such.
g) The purpose of these Guidelines is to provide information to private hospitals, clinics, radiological clinics and medical laboratories regarding the regulations governing advertisements of healthcare services offered by these facilities that are disseminated to the general public.
h) Information which may be disclosed in the advertisement(s) is as follows: General Information of the healthcare facility, Professional Services available at the healthcare facility, Accreditation/Award Announcement, Congratulatory Message etc.
i) Information Which Is Not Permitted is as followes: 1) Comparison, either direct or implied between healthcare facilities is prohibited. 2) Testimonials from patients shall not be publicised or printed. 3) Celebrity Endorsements, etc.
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