product life cycle stages

1. Why a product life cycle?
A company’s positioning and differentiation strategy
must change as the product, market, and competitors
change over the product life cycle(PLC)
When we say that a product has a life cycle we assert four
things:
i. Products have a limited life.
ii. Products sales pass through distinct stages, each
posing different challenges, opportunities and
problems to the seller.
iii. Profits rise and fall at different stages of the product
life cycle.
iv. Products require different marketing, financial,
manufacturing, purchasing, and human resource
strategies in each life – cycle stages.

2. Product Life Cycle
product life cycle is the course of a product’s sales
and profits over time.
product life cycle(PLC) deals with the life of a
product in the market with respect to business or
commercial costs and sales measures.
The five stages of each product lifecycle are product
development, introduction, growth, maturity and
decline.

3. WHAT IS PLC?

5. Time
Product
Develop-
ment
Introduction
Profits
Sales
Growth Maturity Decline
Sales and
Profits
Sales and Profits Over the Product’s Lifetime
Product Life Cycle

6. Sales
Costs
Profits
Marketing Objectives
Product
Price
Low
High cost per customer
Negative
Create product awareness and trial
Offer a basic product
Use cost-plus formula
Distribution Build selective distribution
Promotion Heavy to entice product trial
Summary of Characteristics, Objectives, & Strategies
Introduction Stage of the PLC

7. Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising
Average cost per customer
Rising
Maximize market share
Offer extension, service, warranty
Penetration strategy
Distribution Build intensive distribution
Promotion Reduce to take advantage of demand
Summary of Characteristics, Objectives, & Strategies
Growth Stage of the PLC

8. Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak
Low cost per customer
High
Maximize profits while defending market share
Diversify brand and models
Match or best competitors
Distribution Build more intensive distribution
Promotion Increase to encourage brand switching
Summary of Characteristics, Objectives, & Strategies
Maturity Stage of the PLC

9. Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining
Low cost per customer
Declining
Reduce expenditures and milk the brand
Phase out weak items
Cut price
Distribution Selective: phase out unprofitable outlets
Promotion Reduce to minimum level
Summary of Characteristics, Objectives, & Strategies
Decline Stage of the PLC

11. Three special categories of PLC

12. A Style is a basic and distinctive mode of
expression appearing in a field of human
endeavor. Styles appear in homes, clothing,
art etc.
A Fashion is a currently accepted or popular
style in a given field. Fashion pass through
four stages: Distinctiveness, emulation, mass
fashion, decline.
Fads are fashions that comes quickly into
public view , are adopted with great zeal,
peak early, and decline very fast.

13. 1. Introduction stage is marked with slow
growth in sales and a very little or no
profit
2. sales volume is limited
3. Following are the possible strategies
during the first stage:

14. Rapid-
skimming
strategy
Rapid-
penetration
strategy
Slow-
penetration
strategy
Slow-
skimming
strategy
Price
Low
High
Promotion
High Low

15. RAPID SKIMMING STRATEGY:
This strategy consists of introducing a new
product at high price and high promotional
expenses. The purpose of high price is to recover
profit per unit as much as possible
This strategy makes a sense in following
assumptions:
(a) Major part of market is not aware of the product.
(b) Customers are ready to pay the asking price.
(c) There possibility of competition and the firm wants to
build up the brand preference.
(d) Market is limited in size.

19. During the growth stage, the firm uses several
strategies to sustain rapid market growth.
 Improves product quality and adds new features
and improved styling.
 Adds new models and flanker products(i.e.,
products of different sizes, flavors, and so forth that
protect the main product).
 It enters new market segments
 It increases its distribution coverage and enters new
distribution channels.
 It shifts from product- awareness advertising to
product- preference advertising.
 It lowers price to attract the next layer of price –
sensitive buyers.

20. Three potentially useful ways to change the course
for a brand are market, product, and marketing
program modification.
Following possible strategies are followed:
1. To Do Nothing:New strategies are not formulated
2.Market Modification
Sales volume = no. of brand users * usage rate
per user.
Expand the no. of brand users
Convert nonusers
Enter new market segments
Attract competitors’ customers

21. Increase the usage rate among users
Have consumers use the product on more
occasions.
Have consumers use more of the product on
each occasion
Have consumers use the product in new
ways.
3 Product modification
Trying to stimulate sales by modifying the
product’s characteristics through

22. CONTINUED..
Quality improvement:
Aims at increasing the product’s functional performance.
Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh
Feature improvement
Aims at adding new features, such as size, weight,
materials, additives, and accessories, that expand the
product’s performance, versatility, safety, or
convenience.
Style improvement
Aims at increasing the product’s esthetics appeal.
Eg; New car models, New Coke

23.  Increase investment
 Resolve uncertainties - stable investment
 Selective niches
 Harvesting
 Divesting
 To establish a system for identifying weak products.
 Some firms’ abandon declining markets earlier than
others.