A company's products go through distinct life cycle stages like living things: 1) Products are developed and introduced to the market with low sales and high costs. 2) The growth stage sees rapidly rising sales and increasing profits as the product gains acceptance. 3) In maturity, sales growth slows as most potential buyers have purchased, while marketing costs rise to fend off competition. 4) Finally, the decline stage begins as sales and profits fall off.

1. PRODUCT LIFE
CYCLE
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2. PRODUCT FACT
A company’s products are born, grow, mature,
and then decline, just as living things do. To
remain vital, the firm must continually develop
new products and manage them effectively
through their life cycles.
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3. PRODUCT LIFE CYCLE - DEFINITION
The course of a product’s sales and profits over its
lifetime is called product life cycle. It involves five
distinct stages:
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Product
Development
Introduction
Growth
Maturity
Decline

4. PRODUCT LIFE CYCLE - DIAGRAM
4
Sales
Profit
Sales &
Profits
Losses &
Investment
Product
development
Introduction Growth Maturity Decline
Time

5. PRODUCT LIFE CYCLE - DEFINITION
▸ Product development begins when the
company finds and develops a new product
idea. During product development, sales
are zero, and the company’s investment
costs mount.
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6. INTRODUCTION
▸ Introduction is a period of slow sales
growth as the product is introduced in the
market. Profits are nonexistent in this
stage because of the heavy expenses of
product introduction.
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7. GROWTH
▸ Growth is a period of rapid market
acceptance and increasing profits.
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8. MATURITY
▸ Maturity is a period of slowdown in sales
growth because the product has achieved
acceptance by most potential buyers.
Profits level off or decline because of
increased marketing outlays to defend the
product against competition.
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9. DECLINE
▸ Decline is the period when sales fall
off and profits drop.
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10. DIFFERENT SCENARIO OF PLC
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Product Life
Cycle

11. STRATEGIES IN PLC
11
Characteri
stics
Introduction Growth Maturity Decline
SALES Low Sales Rapidly rising sales Peak Sales Declining sales
COST
High Cost per
Customer
Average cost per
customer
Low cost per
customer
Low cost per
customer
PROFITS Negative Rising profits High profits Declining profits
CONSUMER Innovators Early adopters Middle majority Laggards
COMPETITOR Few Growing numbers
Stable number
beginning to
decline
Declining profits

12. STRATEGIES IN PLC
12
Characteris
tics
Introduction Growth Maturity Decline
MARKETING
OBJECTIVE
Create product
awareness and trial
Maximize
market share
Maximize profit
while defending
market share
Reduce
expenditure and
milk that brand
PRODUCT
STRATEGY
Offer a product
Offer Product
extensions,
service,
warranty
Diversify brand
and models
Phase out weak
items
PRICE
STRATEGY
Use Cost plus
pricing
Price to
penetrate
market
Price to match
or beat
competitors
Cut price

13. STRATEGIES IN PLC
13
Characteristi
cs
Introduction Growth Maturity Decline
DISTRIBUTION
STRATEGY
Build selective
distribution
Build intensive
distribution
Build more
intensive
distribution
Go selective :
phase out
ADVERTISING
STRATEGY
Build product
awareness among
early adopters and
dealers
Build awareness
and interest in the
mass market
Stress brand
differences
and benefits
Reduce to level
needed to retain
hard-core loyal
SALES
PROMOTION
STRATEGY
Use heavy sales
promotion to
entice trial
Reduce to take
advantage of
heavy consumer
demand
Increase to
encourage
brand
switching
Reduce to
minimal level

14. PLC STRATEGY - NPD
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Sales
Time

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