Product Life Cycle: The Zune

According to the text book, all products go through a product life cycle:  introduction, growth, maturity, and decline.  The Zune by Microsoft has gone through all of them, and Microsoft had to adjust their marketing decisions accordingly.  However, since half the world hasn't even heard of Zune, they may have had a little trouble doing that... or maybe their product was just really inferior to their competition's.

The first stage for the Zune, introduction (meaning they had no or negative profits), was in November of 2006.  It was a pretty competitive product called Zune 30; it offered 30 gigs of memory, FM radio, and had a 3 inch screen.  Microsoft's initial marketing technique was a campaign with "Music the way it wants to be".  They advertised heavily on American college campuses and ran Zune-related events to increase awareness of the product.  The first week of sales put it in second place of media players; however, it was only 9% of the market, while the iPod held 63%.

The second stage is growth which means rising sales and peaking profits.  1.2 million Zune players were sold about the first 6 months.  The second generation of the Zune player came out a year after the introduction, in November of 2007.  The transition to the maturity, or declining sales and profits, stage came very quickly at this point.  In May of 2008, Microsoft announced it had sold about 2 million Zunes, about half of that since the introduction of the second generation of the player.

The fourth stage of this product decline, where sales fall rapidly, was very apparent within the next year:  In January of 2009, Microsoft reported from 2007 to 2008 during the fourth quarter, sales had fallen $100 million.  In 2011, it was announced Microsoft would discontinue the player.

Thought to be one of the biggest technology flops of all time, the Zune completed the entire product life cycle in just a few years.