The detalied study of product life style.

1. PRODUCT LIFE CYCLE AND
STRATEGIC MARKETING
DECISIONS
BY MOHAMED YASIR
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2. Product life cycle
• It was popularized by theodore levitt in 1965
• The product life cycle is the process
a product goes through from when it is first
introduced into the market until it declines or is
removed from the market.
• According to Arch Palton “Life cycle of a product
is akin to human life from several angles. Like a
man, the product also takes birth, rapid growth,
attain maturity and then enters the declining
stages”
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3. Product life cycle
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4. The life cycle has four stages
1. Introduction
2. Growth
3. Maturity
4. Decline
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5. 1. Introduction
• A product enters the introduction stage and the
product will then become available in the
market. The main characteristics are :
1. Low sales
2. Low profit or losses
3. High costs because of high promotional
expenses
4. Generally high price
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6. Marketing strategies
• Profit are negatively or low in the introduction
stage because of low sales and heavy distribution
and promotion stage expenses. Much money is
needed to attract distributors . Promotional
expenditures are high because the need to
1. Inform potential consumers
2. Induce product trail
3. Secure distribution
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7. 2. Growth
• More customers begin to buy the product. Sales
will begin to grow and the company which has
been incurring losses, begins to make profit. The
main characteristics are :
1. Rising profits
2. Lower unit cost
3. Competition
4. Expansion in the scale of product
5. Stable or slightly reduce price
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8. Marketing strategies
1. Improving product quality and adding new
product features and improved styling
2. Adding new models and flanker products
3. Entering new market segment
4. Increasing distribution coverage and entering
new distribution channels
5. Lowering price to attract the next layer of price
sensitive buyers
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9. 3. Maturity
• This stage has two part
• First the demand for the product reaches as
saturation point, profit increases and reaches it’s
maximum. Later on the profit will start falling.
Example : video tape recorder
• Later part there is no growth of sales.
Competition becomes more tough. Stock become
large and profit decline. The firm will use some
strategies like market modification.
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10. • The main characteristics are :
1. Sales grow at diminishing rate
2. Price tend to fall
3. Stiff competition
4. Product supply may exceed demand
5. Product modification and improvement
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11. Marketing strategies
• Three strategies for maturity stage :
A. Market modification
1. Converting nonusers
2. Entering new market segment
3. Winning competitor’s customers
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12. B. Product modification
• Quality improvement
• Feature improvement
• Style improvement
C. Marketing mix modification
• Price, distribution, advertising,
sales promotion, personal selling and service
are the elements.
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13. 4. Decline
• This stage sales begin to fall. Customers go for
newer and better products due to change in the
taste, technological development etc… example :
typewriters.
• The main characteristics are :
1. Fall in prices
2. No promotional expenses
3. Product technology becomes obsolete
4. Reducing distribution network to the minimum
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14. Marketing strategies
1. Increasing the firm’s investment
2. Maintaining the firm’s investment
3. Decreasing the firm’s investment
4. Harvesting or milking
5. Divesting
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15. Advantages
• It helps in planning a new product
• It helps in determining the cost of product
development
• It helps in setting price
• It helps in sales promotion
• It helps in product differentiation
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16. Disadvantages
• It is impossible to determine the particular stage
in which a product is.
• It is not necessary that all stages can be
applicable to every product
• Product life cycle alone cannot be a device for
marketing success
• PLC does not really consider the competitive
position or PEST factors (political, economic,
social and technological factor ).
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