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    Plc

    Uploaded by

    Jai Jaisinghani

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Plc

    Uploaded by

    Jai Jaisinghani
    2 views12 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2 views12 pages

    Plc

    Uploaded by

    Jai Jaisinghani

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 12

    The Product

    Life Cycle
    • A product is normally perceived to pass through four
    stages over its life cycle:
    • Introduction, growth, maturity, and decline

    • Each stage requires different marketing strategies


    • Applies to product categories, not to brands.
    • Related to the concept of diffusion of innovation
    • Different products will have differently-shaped life cycle
    curves & will diffuse at different rates
    Product Life Cycle

    Sales and
    Profits ($)

    Sales

    Profits

    Time
    Product Introduction Growth Maturity Decline
    Develop-
    ment

    Losses/
    Investments (Rs)
    • Most product life cycles are bell-shaped curves, divided into four
    stages: introduction, growth, maturity, and decline
    1. Introduction—A period of slow sales growth as the product is
    introduced in the market. Profits are non-existent because of
    the heavy expenses of product introduction.
    2. Growth—A period of rapid market acceptance and substantial
    profit improvement.

    3. Maturity—A slowdown in sales growth because the product has


    achieved acceptance by most potential buyers.
    Profits stabilize or decline because of increased competition.
    4. Decline—Sales show a downward drift and profits erode.
    9/3/20XX Presentation Title 5
    Strategies for managing products at different
    PLC stages

    9/3/20XX Presentation Title 6


    Introduction Stage of the
    PLC

    Sales Low sales


    Costs High cost per customer

    Profits Negative
    Create product awareness
    Marketing Objectives
    and trial
    Product Offer a basic product

    Price Use cost-plus


    Distribution Build selective distribution
    Advertising Build product awareness among early
    adopters and dealers
    Growth Stage of the PLC

    Sales Rapidly rising sales

    Costs Average cost per customer

    Profits Rising profits


    Marketing Objectives Maximize market share
    Product Offer product extensions, service, warranty
    Price Price to penetrate market
    Distribution Build intensive distribution
    Advertising Build awareness and interest in the mass
    market
    Maturity Stage of the PLC

    Sales Peak sales

    Costs Low cost per customer

    Profits High profits


    Marketing Objectives Maximize profit while defending
    market share
    Product Diversify brand and models
    Price Price to match or best competitors
    Distribution Build more intensive distribution
    Advertising Stress brand differences and benefits
    Decline Stage of the PLC

    Sales Declining sales

    Costs Low cost per customer

    Profits Declining profits


    Marketing Objectives Reduce expenditure and milk the brand
    Product Phase out weak items
    Price Cut price
    Distribution Go selective: phase out unprofitable outlets
    Advertising Reduce to level needed to retain
    hard-core loyal customers
    Characteristics of Life Cycles
    • length of the life cycle will vary across markets- some are
    quite short and may be getting shorter

    • Some fads have very short life cycles, while other products
    stay at maturity for years

    • The life cycle must be considered in relation to a specific


    market; stage may vary across markets
    • In high-tech markets, life cycles are very short
    • Some products do not make it through all four stages; they
    may fail in introduction
    Different Life Cycles
    Aggregate Part a - Extended Part b - Fad
    sales introduction stage

    Time in years Time in years

    Part c - Indefinite
    Aggregate

    maturity stage
    sales

    Time in years
    9/3/20XX Presentation Title 15

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