Product Life Cycle
PRODUCT LIFE CYCLE (PLC)
(Compiled by Deep Banerjee, Marketingpundit.com) Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline). The conditions under which a product is sold will also change over time. The Product Life Cycle refers to the succession of stages a product goes through. Product Life Cycle Management is the succession of strategies used by management as a product goes through its life cycle After a period of development, a product: - which is introduced or launched into the market gains more and more customers as it grows; - eventually the market stabilizes and the product becomes mature; - then after a period of time the product is overtaken by development and - with the introduction of superior competitors, it goes into decline and is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers.
Characteristics/ Strategies for the differing stages of the Product Life Cycle
1. Market introduction stage • Need for immediate profit is not a pressure. • Product is promoted to create awareness. • Demand has to be created. • Customers have to be prompted to try the product. • Costs high. • Sales volume low. • No/ little competition - competitive manufacturers watch for acceptance/ segment growth. • Limited numbers of product are available in few channels of distribution. • Losses. 2. Growth stage • Competitors are attracted into the market with very similar offerings. • Products become more profitable and companies form alliances, joint ventures and take each other over. • Sales volume increases significantly. • Costs reduced due to economies of scale. • Public awareness is high. • Advertising
(Compiled by Deep Banerjee, Marketingpundit.com) Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline). The conditions under which a product is sold will also change over time. The Product Life Cycle refers to the succession of stages a product goes through. Product Life Cycle Management is the succession of strategies used by management as a product goes through its life cycle After a period of development, a product: - which is introduced or launched into the market gains more and more customers as it grows; - eventually the market stabilizes and the product becomes mature; - then after a period of time the product is overtaken by development and - with the introduction of superior competitors, it goes into decline and is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers.
Characteristics/ Strategies for the differing stages of the Product Life Cycle
1. Market introduction stage • Need for immediate profit is not a pressure. • Product is promoted to create awareness. • Demand has to be created. • Customers have to be prompted to try the product. • Costs high. • Sales volume low. • No/ little competition - competitive manufacturers watch for acceptance/ segment growth. • Limited numbers of product are available in few channels of distribution. • Losses. 2. Growth stage • Competitors are attracted into the market with very similar offerings. • Products become more profitable and companies form alliances, joint ventures and take each other over. • Sales volume increases significantly. • Costs reduced due to economies of scale. • Public awareness is high. • Advertising