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    Product Life-Cycle: Product Design and Development

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    Vimal Gupta
    The document discusses the product life cycle which describes the stages a product goes through from development to decline in the market. It outlines the five phases of the product life cycle as product development, introduction/launch, growth, maturity, and decline. For each phase, it describes the typical characteristics related to sales, costs, profits, and marketing objectives. Finally, it notes that strategies should be based on the current phase in the product life cycle.

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    Product Life-Cycle: Product Design and Development

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    Vimal Gupta
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    The document discusses the product life cycle which describes the stages a product goes through from development to decline in the market. It outlines the five phases of the product life cycle as product development, introduction/launch, growth, maturity, and decline. For each phase, it describes the typical characteristics related to sales, costs, profits, and marketing objectives. Finally, it notes that strategies should be based on the current phase in the product life cycle.

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    The document discusses the product life cycle which describes the stages a product goes through from development to decline in the market. It outlines the five phases of the product life cycle as product development, introduction/launch, growth, maturity, and decline. For each phase, it describes the typical characteristics related to sales, costs, profits, and marketing objectives. Finally, it notes that strategies should be based on the current phase in the product life cycle.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    48 views17 pages

    Product Life-Cycle: Product Design and Development

    Uploaded by

    Vimal Gupta
    The document discusses the product life cycle which describes the stages a product goes through from development to decline in the market. It outlines the five phases of the product life cycle as product development, introduction/launch, growth, maturity, and decline. For each phase, it describes the typical characteristics related to sales, costs, profits, and marketing objectives. Finally, it notes that strategies should be based on the current phase in the product life cycle.

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    of 17

    Lesson 02

    Product Design and Development


    Product Life-Cycle

    Dr. Inderdeep Singh


    Department of Mechanical and Industrial Engineering

    1
    Product Life-Cycle (PLC)
    Product Life-Cycle (PLC)

    ▪ Product life cycle (PLC) is the course that a product sales and
    profits take over its lifetime

    ▪ It shows the stages that products go through from development to


    decline from the market
    Why PLC?
    • PLC determines revenue earned

    • Contributes to strategic marketing planning

    • Helps the firm to identify when a product needs support, redesign,


    withdrawal, etc.

    • Helps in planning for the new product development

    • Helps in forecasting and managing cash flow


    The Phases of the PLC
    • Product development
    • Introduction/Launch
    • Growth
    • Maturity
    • Decline
    Sales and Profits Over the Product’s Lifetime

    Product
    Development Introduction Growth Maturity Decline
    Sales and Profits

    Sales

    Profits

    Time
    Phase I: Product development
    • New ideas
    • Market survey-is it required? Can it be produced at a profit?
    • Product development and refinement
    • Test Marketing
    • Analysis of test marketing results
    • Preparation for launch, publicity, marketing campaign
    Phase II: Introduction/Launch
    • Introduction of the product into the market
    • It may be new product or old product to the new market
    • Demand is low
    • High cost/low sales
    • Advertisement and promotion
    • Monitor initial sales
    Introduction phase
    Characteristics and Objectives
    Sales Low
    Costs High cost per customer
    Profits Negative
    Marketing
    Create product awareness and trial
    Objectives
    Phase III: Growth
    • This period is the time to improve efficiency and product availability
    as well as service

    • Cost efficiency, time-to-market, pricing and discount policies are the


    major factors in gaining customer confidence

    • Increased consumer awareness

    • Sales growth rate increases because of limited or no competition

    • Revenue increases
    Growth phase
    Characteristics and Objectives

    Sales Rapidly rising

    Costs Cost per customer is average

    Profits Rising
    Marketing
    Maximize market share
    Objectives
    Phase IV: Maturity
    • This period is the period of the highest returns from the product.
    • Sales reach peak
    • Marketing cost of the product declines
    • Ratio of revenue to cost high
    • Sales growth likely to be low
    • Competition likely to be greater
    • Monitor market-changes/new strategies?
    Maturity phase
    Characteristics and Objectives
    Sales Peak

    Costs Low cost per customer

    Profits High
    Maximize profits while defending
    Marketing Objectives
    market share
    Phase V: Decline
    • Competitors enter the market with
    -Better product features
    -Advanced technology
    -Reduced prices

    • Sales starts declining


    • Marketing cost of product rises
    • Decision to withdraw may be dependent on availability of new
    products and whether fashions/trends will come around again?
    Decline phase
    Characteristics and Objectives
    Sales Declining

    Costs Low cost per customer

    Profits Declining
    Reduce expenditures and milk
    Marketing Objectives
    the brand
    Strategies based on Product Life-Cycle

    • Product
    -Introduction: Offer basic product
    -Growth: Offer product extension, service, warranty
    -Maturity: Diversify brands/models
    -Decline: Phase out weak products
    • Price
    • Distribution
    • Advertising
    • Sales promotion
    Thank
    You

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