product development life cycle, introduction ,growth,maturity,decline

1. PRODUCT DEVELPOMENT LIFE
CYCLE
 Product Life Cycle (PLC):The Product Life Cycle (PLC) is based
upon the biological life cycle. For example, a seed is planted
(introduction); it begins to sprout (growth); it shoots out leaves
and puts down roots as it becomes an adult (maturity); after a
long period as an adult the plant begins to shrink and die out
(decline).
 Each product may have a different life cycle
 PLC determines revenue earned
 Contributes to strategic marketing planning
 May help the firm to identify when
a product needs support, redesign, reinvigorating, withdrawal,
etc.
 May help in new product development planning
 May help in forecasting and managing cash flow

2. Product Life Cycle
Product life cycle is the course of a product’s
sales and profits over time.
Product life cycle(PLC) deals with the life of a
product in the market with respect to
business or commercial costs and sales
measures.
The five stages of each product lifecycle are
product development, introduction, growth,
maturity and decline.

3. PRODUCT DEVELOPMENT STAGE
 Begins when the company develops a new-
product idea
 Sales are zero
 Investment costs are high
 Profits are negative
 Innovators are targeted

5. INTRODUCTION STAGE
 Low sales
 High cost per customer acquired
 Negative profits
 Little competition
 Early adopters are targeted

6. Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers
Characteristics of INTRODUCTION
stage

7. GROWTH STAGE
 Rapidly rising sales
 Average cost per customer
 Rising profits
 Early majority are targeted
 Growing competition

8. Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,
warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the
mass market
Characteristics of GROWTH stage

9. MATURITY STAGE
 Sales peak
 Low cost per customer
 High profits
 Late majority are targeted
 Competition begins to decline

10. Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defending
market share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
Characteristics of MATURITY stage

11. DECLINE STAGE
 Declining sales or dip in sales
 Low cost per customer
 Declining profits
 Laggards are targeted
 Declining competition

12. Characteristics of DECLINE stage
Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk the brand
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitable
outlets
Advertising Reduce to level needed to retain
hard-core loyal customers

13. Example: New Flavor of Pepsi
 Stage 1: Market Introduction
 Pepsi bottles the new flavored product and places it
on the market for consumers.
 Pepsi also spends a lot of money advertising the new
flavor creating awareness.
 Stage 2: Market Growth
 Customers like the flavor and begin to make routine
purchases.
 Coke introduces their competing flavor.

14.  Stage 3: Market Maturity
 More competitors enter the market taking some of
Pepsi’s profits.
 Stage 4: Sales Decline
 Customers have moved on to the next new flavor.
 Some loyal fans stay behind.

15. Three special categories of PLC

16. Continued…
A Style is a basic and distinctive mode of
expression appearing in a field of human
endeavor. Styles appear in homes, clothing,
art etc.
A Fashion is a currently accepted or popular
style in a given field. Fashion pass through
four stages: Distinctiveness, emulation,
mass fashion, decline.
Fads are fashions that comes quickly into
public view , are adopted with great zeal,
peak early, and decline very fast.