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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.
