At the introduction stage, PQ uses a market skimming pricing strategy. Throughout the later stages, prices gradually reduce for different reasons. Production costs decrease in growth due to economies of scale, but change little in maturity. They may rise in decline due to inefficiencies. Marketing costs are highest in growth to target the mass market, lower in maturity as the product is established, and cut in decline when production ceases.

1. PRODUCT LIFE CYCLE

2. Product Life CyclesSalesDevelopmentIntroductionGrowthMaturitySaturationDeclineTime

3. Introduction Stage of the PLCSalesLow sales CostsHigh cost per unitProfitsNegativeMarketing ObjectivesCreate product awareness and trialPriceUsually Price Penetration or Skimming for innovative productAdvertisingHeavy Advertisement

4. Growth Stage Of The PLCSalesRapidly rising sales Average cost per unit (EOS)CostsProfitsRising profitsMarketing ObjectivesMaximize market shareProductOffer product extensions, service, warrantyPricePenetration if new entrantsAdvertisingBuild awareness and interest in the mass market

5. Maturity Stage Of The PLCSalesPeak salesCostsLow cost per unit (EOS)High but Generally lower than Growth stageProfitsMarketingObjectivesMaximize profit while defending market shareProductDiversify brand and modelsPrice to match or best competitorsPriceStress brand differences and benefitsAdvertising

6. Decline Stage Of The PLCSalesDeclining salesCostsLow cost per unitProfitsDeclining profitsMarketing ObjectivesReduce expenditure and milk the brandProductPhase out weak itemsPriceCut priceAdvertisingReduce to level needed to retain hard-core loyal customers

7. Product life cycle costingMaximizing the length of the cycle

8. Design costs of the product

9. Minimize time to market

10. Manage the product cash flowsProduct Life CycleSalesEffects of ExtensionStrategiesTime