Product life cycle & Marketing Strategy

1. Jagran
Lakecity
University
TO:- MRS. JASMIN KHARE
BY:- AAKASH TIWARI

2. Product Life Cycle &
Marketing Strategy

4. Product Life Cycle:-
A product is introduced among consumers, and if
consumers perceive it as meeting their needs and want, it
experiences a period of growth. Subsequently, it reaches
the stage of maturity and when it loses its appeal, its
decline starts and eventually is may be taken off the
market (demise). The classical product life cycle curves
are depicted as “S” shaped and generally divided in four
stages: Introduction, growth, maturity, and decline.

6. Why would demand change?
•New products meet needs better
» Maruti Swift v/s Maruti 800
• Technology changes
» Video conference v/s air travel
• Substitutes replace a product
» Telegrams v/s SMS, SMS v/s Mobile Chat
• Population moves to the next level in Maslow’s NH
» Basic variant of a car to full loaded model

7. PLC Concept is Based on Four Premises
Products have a limited life.
Profits from a product vary at different stages in the life
cycle.
Product sales pass through distinct stages, each with
different marketing implications.
Products require different strategies at different life
cycle stages.

8. Introduction Growth Maturity Decline
(d) Classical Life Cycle Pattern
Time
Sales
Profits
Loss
Common Product Life Curves

9. Introduction Stage
The introductory stage is viewed as fairly risky and quite expensive
because large amounts of money is spent on advertising and other tools of
marketing communications to create consumer awareness in sufficiently
large numbers, and encourage trial.
3D Televisions: 3D may have been around for a few decades, but only
after considerable investment from broadcasters and technology
companies are 3D TVs available for the home, providing a good example
of a product that is in the Introduction Stage.

10. Introduction Stage of the PLC
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

12. Growth Stage
The growth stage of life cycle is characterized by a
sharp rise in sales. Only a small percentage of new
products introduced survive to reach the growth
stage.
Cell phones today, internet, LCD TV

13. 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
Growth Stage of the PLC

15. Maturity Stage
Most products after surviving competitive battles, winning
customer confidence and successful through growth phase enter
their maturity stage. The sales plateau, and this flattening of
sales usually lasts for some time because most products in the
category have reached their maturity stage, and there is stability
in terms of demand, technology, and competition.
Laptops: Laptop computers have been around for a number of
years, but more advanced components, as well as diverse
features that appeal to different segments of the market, will help
to sustain this product as it passes through the Maturity stage.

16. 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
Maturity Stage of the PLC

17. Decline Stage
Decline stage sets in when customer preferences
change due to the availability of technologically
superior products and consumers’ shift in values,
beliefs, and tastes to products offering more value.

18. 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
Decline Stage of the PLC

19. During the decline phase, the firm
generally has three options:
• Maintain the product in hopes that competitors will exit.
Reduce costs and find new uses for the product.
• Harvest it, reducing marketing support and coasting
along until no more profit can be made.
• Discontinue the product when no more profit can be
made or there is a successor product.

20. Introduction Growth Maturity Decline
Marketing
objectives
Create product
awareness &
trials
Gain market
share,
create strong
positions
Defend market
share, create
profits
Reduce
expenses
milk brands
Product
strategy
Offer basic
Products
Offer product
extensions, build
service
differentiation
Diversify
brands,
items & models
Eg. Blackberry
Phase out
weak
products
Price Charge cost
Plus
Penetration price
promotions, deals
Eg Dominos in
India
Match pricing
to
strong
competitors
Cut prices
Advertising &
Communicati
ons
Chosen market
segments are
addressed
Segment
awareness
Advertise
differentiation
Reduce
levels to
retain
loyalists
Place Build Selective
Distribution
Build intensive
distribution
Build more
intensive
Go Selective:
Phase out
Marketing Strategies in the PLC