A product is introduced among consumers, and if consumers perceive it asmeeting 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). Theclassical product life cycle curves are depicted as “S” shaped and generallydivided in four stages: Introduction, growth, maturity, and decline.
Common ProductLife CurvesSales Sales Sales Time Time Time (a) Growth-Decline Plateau (b) Cycle-Recycle Pattern (c) Innovative Maturity or Scalloped Pattern
Common ProductLife Curves Sales Profits Loss Introduction Growth Maturity Decline Time (d) Classical Life Cycle Pattern
Pioneer Follower First choice of market Can bring in superior segments. technology.Pioneer andFollower Influence on consumer Can take advantage ofAdvantages attitudes and choice criteria. pioneer’s product mistakes. Pioneer defines the rules of the Ability to take advantage of game. pioneer’s positioning mistakes. Switching costs higher for early Ability to take advantage of adopters of pioneer’s product. pioneer’s marketing mistakes. Gaining distribution advantage. Can take advantage of pioneer’s resources limitations. Economies of scale and more experience. Possibility of pre-empting scarce resources and suppliers.
Introduction StageThe introductory stage is viewed as fairly risky and quite expensive becauselarge amounts of money is spent on advertising and other tools of marketingcommunications to create consumer awareness in sufficiently large numbers,and encourage trial.
Growth StageThe growth stage of life cycle is characterised by a sharp rise in sales. Only asmall percentage of new products introduced survive to reach the growthstage.
Maturity StageMost products after surviving competitive battles, winning customerconfidence and successful through growth phase enter their maturity stage.The sales plateau, and this flattening of sales usually lasts for some timebecause most products in the category have reached their maturity stage, andthere is stability in terms of demand, technology, and competition.
Introduction Growth Maturity Decline Characteristics Market Growth Rate Moderate High Insignificant Negative (Rs) Technical Change High Moderate Limited LimitedProduct Life In Product DesignCycle Stages,Characteristic Market Segments Few Few to many Few to many Fews and Competitors Few Many Limited FewStandard Profitability Negative High High for Market- LowResponses share leaders Company’s Standard Stimulate primary Gain market Gain market share Harvest Responses demand share Product Improve quality Continue quality Concentrate on No change improvements features Product Line Narrow Broad Hold line length Reduce line length Price Skimming or Reduce Hold or reduce Reduce Penetration Promotion High High Hold or reduce Reduce Distribution Selective Intensive Intensive Selective
Decline StageDecline stage sets in when customer preferences change due to the availabilityof technologically superior products and consumers’ shift in values, beliefs, andtastes to products offering more value.
Implications and Limitations of Product LifeCycle ConceptProduct life cycle concept shows a framework to spot the occurrence ofopportunities and threats in a product market and the industry. This can helpfirms to reassess their objectives, strategies, and different elements ofmarketing programme.