2. WHAT IS PRODUCT LIFE
CYCLE?
According to Phillip Kotler: PLC is an attempt to recognise distinct
stages in the sales history of the product.
According to Arch Patton: PLC has many points of similarity with the
human life cycle; the product is born, grows lustily, attains dynamic
maturity then enters its declining year.
3. WHAT IS PRODUCT LIFE
CYCLE ?
It describes the stages a new product goes through from beginning
to end.
It is a tool used by marketing professionals to understand the
market and plan the marketing mix.
The life cycle concept may apply to a brand or to a category of
product. Its duration may be as short as a few months for a fad
item or a century or more for product categories such as the
gasoline-powered automobile.
11. CHARACTERISTICS
STAGES INTRODUCTION GROWTH MATURITY DECLINE
1. Sales low Rapidly
increasing
at peak declining
2. Costs High cost per
customer
Average cost
per customer
Low cost per
customer
Low cost per
customer
3. Profits negative More profit High profit Declining profit
4. Customer innovators Early adopters Early majority+
late majority
laggards
5. Competitor few More in
number
Stable number,
beginning to
decline
Declining
numbers
OBJECTIVES
Create product
awareness &
trial
Maximize
market share
Maximize
profits &
defend market
share
Reduce
expenses
12. STRATEGIES
STAGES INTRODUCTION GROWTH MATURITY DECLINE
1. Product Offer basic
product
Offer product
extension,
service,
warranty
Diversify
brands/ models
Phase out weak
products
2. Price Change cost
plus
Price to
penetrate
market
Price to match
better
competition
Cut price
3. Distribution Selective intensive More intensive Selective phase
out of
unprofitable
unit
4. Advertising Build product
awareness
among early
adopters &
dealers
Build
awareness &
interest in
mass market
Stress on brand
difference &
benefits
Reduce to
hardcore loyals
5. Sales
promotion
Heavy to induce
trial
Reduce due to
increased
demand
More to
encourage
brand
Reduce to
minimum level
15. LIMITATIONS OF PLC
Unreliability
False assumptions
Changing customer needs
Increase complexity between phases
Inefficient when dealing with brands or services
Too much emphasis on new development of product
Not every product goes through every stage
The length of time a product spends in any one stage may vary
Some products may move through the entire cycle in weeks
Repositioning of a product can lead to a new life cycle
