Product life cycle

Bhawna Sharma Sr. Lecturer, Amity

PRODUCT LIFE CYCLE

The Product Life Cycle ( PLC ) is an important concept in marketing that provides insights into a products competitive dynamics.

Product Life Cycle

Sales and Profits ($) Sales

Profits Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline

PRODUCT LIFE CYCLE

Reasons for change in behavior of PLC :

--Changes in the consumer needs and preferences --Advancing Technology --Competition, Government Policies etc. --Changes in number of potential buyers

Stages in PLC :
Introduction, Growth, Maturity, And Decline.

Introduction Stage of the PLC

Sales
Costs Profits
Marketing Objectives Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Build selective distribution Build product awareness among early adopters and dealers

Product Price Distribution Advertising

Growth Stage of the PLC

Sales Costs Profits

Marketing Objectives

Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty

Product Price Distribution Advertising

Price to penetrate market

Build intensive distribution Build awareness and interest in the mass market

Maturity Stage of the PLC

Sales Costs Profits

Marketing Objectives

Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models

Product Price Distribution Advertising

Price to match or best competitors

Build more intensive distribution Stress brand differences and benefits

Decline Stage of the PLC

Sales Costs Profits

Marketing Objectives

Declining sales Low cost per customer Declining profits Reduce expenditure and nourish the brand Phase out weak items

Product Price Distribution Advertising

Cut price
Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers

Relationship between Advertising and the Product Life Cycle

Competitive

Comparative

Pioneering

Management of the Cycle

Pricing, Distribution & Product characteristics also tend to change with change in stage of Product life Cycle.

Extending the PLC

Extending the PLC

Product Life Cycle can be extended in various ways depending on the product. A branded good can enjoy continuous growth, such as Microsoft, because the product is being constantly improved & advertised, & maintains a strong brand loyalty

Extending the PLC

EXTENSION STRATEGIES extend the life of the product before it goes into decline. Marketers use various techniques to improve sales.

Extending the PLC

ADVERTISING- Try to gain a new audience or remind the current audience. PRICE REDUCTIONMore attractive to customers. ADDING VALUE- Add new features to the current product. EXPLORE NEW MARKETS- Try selling in different countries. NEW PACKAGING- Brightening up old packaging, or subtle changes.

Extending the PLC

In case of Pharmaceutical products, a product can be repositioned in a different segment of the market, where the products formulation can be altered, without changing brand name, & then a different section of customers can be targeted. PLC can also be extended by finding out newer uses for the product. These uses can extend the Growth stage further before going into the Maturity stage.