Product Life Cycle

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What is Product Life Cycle?

•       A new product progresses through a sequence of stages from introduction to growth, maturity and decline and this sequence of stages is known as Product Life Cycle.

•       PLC is directly related to Market Situations (like competitors) and hence it directly affects the marketing strategies and marketing mix.

Graphical representation of PLC

Introduction Stage

•       Product is introduced in the market for the first time.

•       Thus, there may not be ready market for the product.

•       Build Product awareness and create demand for the product.

•       Low sales and profit.

Marketing Mix at Introduction stage

•       Product branding and quality level is established and intellectual property protection such as patent and trademarks are obtained.

•       Pricing strategy to be obtained is either market skimming or market penetration.

•       Distribution is selective until consumers show product acceptance

•       Promotion aims at building product awareness and educate consumers about the product.

Growth Stage

•       Demand of the Product increases and size of the market grows.

•       Sales and profit also goes up.

•       Competitors enter the market.

•       Follow competition oriented pricing strategy.

•       Marketing and distribution become decisive.

Marketing Mix at Growth stage

•       Product quality is maintained and additional features and support services may be added.

•       Pricing is maintained as demand increases with little competition.

•       Distribution channels are added as demand increases and consumers accept the product.

•       Promotion is aimed at a broader audience.

Maturity Stage

•       Demand reach the saturation point.

•       Supply from competitive firms increase.

•       Price competition becomes intense and exploits the brand loyalty.

•       Product and packaging modification.

Marketing Mix at Maturity stage

•       Product features may be enhanced to differentiate the product from that of competitors.

•       Pricing may be lower because of the new competition.

•       Distribution become intensive.

•       Promotion emphasizes product differentiation.

Decline Stage

•       Sales and profit begins to fall.

•       Demand shrinks.

•       Prices and margin gets depressed.

•       Firms try to link up the sales of these product to some other premium product.

Marketing Mix at Decline stage

•       Maintain the product, possibly rejuvenating it by adding new features and finding new uses.

•       Harvest the product, reduce cost and continue to offer it possibly to the loyal niche segment.

•       Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.