Product life cycleppt @ doms students

1. 21-1
Product Life
Cycle

2. A product is introduced among consumers, and if consumers perceive it as
meeting their needs and want, it experiences a period of growth.
Subsequently, it reaches the stage of maturity and when it loses its appeal,
its decline starts and eventually is may be taken off the market (demise). The
classical product life cycle curves are depicted as “S” shaped and generally
divided in four stages: Introduction, growth, maturity, and decline.

3. Common Product
Life Curves
Sales Sales Sales
Time Time Time
(a) Growth-Decline Plateau (b) Cycle-Recycle Pattern (c) Innovative Maturity or
Scalloped Pattern

4. Introduction Growth Maturity Decline
(d) Classical Life Cycle Pattern
Time
Sales
Profits
Loss
Common Product
Life Curves

5. Pioneer and
Follower
Advantages
Pioneer Follower
 First choice of market
segments.
 Can bring in superior
technology.
 Influence on consumer
attitudes and choice criteria.
 Can take advantage of
pioneer’s product mistakes.
 Pioneer defines the rules of the
game.
 Ability to take advantage of
pioneer’s positioning mistakes.
 Switching costs higher for early
adopters of pioneer’s product.
 Ability to take advantage of
pioneer’s marketing mistakes.
 Gaining distribution advantage.  Can take advantage of
pioneer’s resources limitations.
 Economies of scale and more
experience.
 Possibility of pre-empting
scarce
resources and suppliers.

6. Introduction Stage
The introductory stage is viewed as fairly risky and quite expensive because
large amounts of money is spent on advertising and other tools of marketing
communications to create consumer awareness in sufficiently large numbers,
and encourage trial.

7. Growth Stage
The growth stage of life cycle is characterised by a sharp rise in sales. Only a
small percentage of new products introduced survive to reach the growth
stage.

8. Maturity Stage
Most products after surviving competitive battles, winning customer
confidence and successful through growth phase enter their maturity stage.
The sales plateau, and this flattening of sales usually lasts for some time
because most products in the category have reached their maturity stage, and
there is stability in terms of demand, technology, and competition.

9. Product Life
Cycle Stages,
Characteristic
s and
Standard
Responses
Introduction Growth Maturity Decline
Characteristics
Market Growth Rate
(Rs)
Moderate High Insignificant Negative
Technical Change High Moderate Limited Limited
In Product Design
Market Segments Few Few to many Few to many Few
Competitors Few Many Limited Few
Profitability Negative High High for Market-
share leaders
Low
Company’s Standard
Responses
Stimulate primary
demand
Gain market
share
Gain market share Harvest
Product Improve quality Continue quality
improvements
Concentrate on
features
No change
Product Line Narrow Broad Hold line length Reduce line
length
Price Skimming or
Penetration
Reduce Hold or reduce Reduce
Promotion High High Hold or reduce Reduce
Distribution Selective Intensive Intensive Selective

10. Decline Stage
Decline stage sets in when customer preferences change due to the availability
of technologically superior products and consumers’ shift in values, beliefs, and
tastes to products offering more value.

11. Implications and Limitations of Product Life
Cycle Concept
Product life cycle concept shows a framework to spot the occurrence of
opportunities and threats in a product market and the industry. This can help
firms to reassess their objectives, strategies, and different elements of
marketing programme.