The very concept of PLC is to utilize it for suggesting and implementing strategic and tactical moves relevant to subsequent stages, Levit exploited the model for giving insights on how to utilize the said knowledge.

1. Exploit Product Life Cycle
By Theodore Levitt

2. “suggest some ways of using the concept
effectively and of turning the knowledge of its
existence into a managerial instrument of
competitive power”

3. Product Lifecycle – Entire Industry
SALES
Market development Growth Maturity Decline
Stage #1
TIME
1 2 3 4 5 6 7
Stage #2
Stage #3
Stage #4

4. Given a proposed new product or service, how and to what extent can the shape and duration of each
stage be predicted?
Given an existing product, how can one determine what stage it is in?
Given all this knowledge, how can it be effectively used?

5. Development Stage
• First brought into market
• No proven demand
• Sales are low
• Demand is created
• Complexity
• Degree of newness
• Fit into customer needs
• Cure vs. Superior substitutes
• Cons
• Cost and time
• Most products generally have descending curve
• “Used apple” policy
Market development
Stage #1

6. Growth
Stage #2
Growth Stage
• Gradual Rise in sales
• Consumer demand rises substantially
• Competitors join
• Product and brand differentiation develops
• Consumer acceptance accelerates
• Trying vs. Prefer

7. Growth
Stage #3
Maturity
• Market saturation
• No more distribution pipelines need be filled
• Holding distributing outlets
• Finer differentiation for brand loyality
• Retaining self space
• Dependence on distributors and retailers are minimum
• Communication directly with consumer
• Competing more effectively
• Fashion apparels vs Industrial fasteners

8. Growth
Stage #4
Decline
• Industry transformed
• Overcapacity issues
• Consumer boredom
• Survivor effect
• Merger or buyout

9. Preplanning Importance
• Foresee the profile of the proposed product’s cycle,
• rational approach
• Create valuable lead time
• Developing an orderly series of competitive moves,
• in expanding or stretching out the life of a product,
• in maintaining a clean product line, and
• in purposely phasing out dying and costly old products.

10. Failure possibilities
• The more complex the product, the more distinctive its newness, the less
influenced by fashion.
• The greater the number of persons influencing a single buying decision, the more
costly, and the greater the required shift in the customer’s usual way of doing
things.

11. Success chances
• Newness
• Favorable first experience
• Special visibility
• Pricing decisions
• Skim the cream?
• Exclusion?
 estimate of the probable length of the product’s life
cycle,
 the degree of patent protection the product is likely to
enjoy,
 the amount of capital needed to get the product off the
ground,
 the elasticity of demand during the early life of the
product, and many other factors.

12. • Priced too low at the outset may catch on so quickly and last short
• A slower rate of consumer acceptance may extend their life cycles and raise the
total profits they yield.
• The actual slope, or rate of the growth stage, depends on some of the same
things as does success or failure in Stage I
• Patent
• The more producers there are of a new product, the more effort goes into
developing a market for it.
Success chances

13. Originator’s Burdens
• Solid demand exists
• Imitators rush to capitalize on
Rapid growth characterizes the total demand
Share the boom with new competitors

14. Profits squeeze
• serious squeeze on originators profit margins
• per-unit profits are negative
• Sales volume is too low at existing prices
• profits boom as output rises and unit
production costs fall
• It is the presence of such lush profits that
both attracts and ultimately destroys
competitors.

16. Sequential actions
• policy of “life extension” or “market stretching.”
• Idea of planning in advance of the actual launching of a new product to take
specific actions later in its life cycle which appears to have great potential as an
instrument of long-term product strategy.
• actions designed to sustain its growth and profitability

17. Nylons life
• Military parachutes,
thread, rope.
• Circular knit market

18. What did they do
• Promoting more frequent usage of the product among current users.
• increasing trend toward “bareleggedness” among women
• to reiterate the social necessity of wearing stockings at all times
• Developing more varied usage of the product among current users.
• Hosiery was to be converted from a “neutral” accessory to a central
ingredient of fashion, with a “suitable” tint and pattern for each outer
garment in the lady’s wardrobe.

19. What did they do
• New Users
• attempting to legitimize the necessity of wearing hosiery among early
teenagers and sub teenagers.
• Advertising, public relations, and merchandising of youthful social and style
leaders would have been called for.

20. • New Uses

21. Thankyou