Product Life Cycle
Product Life Cycle
Introduction: This paper aims at analysing the usefulness of the Product Life Cycle (PLC) concept to the marketers. It will describe the different stages of the PLC concept and their respective implications on the marketing mix and the strategies which can be adopted during the different phases.
Every new product right from its entrance in the market till its elimination from the market goes through a certain sequence of stages known as Product Life Cycle. There are four stages popularly addressed by the product life cycle which are: Introduction, growth, maturity and decline recognized as distinct stages in the sales history of a product (Kotler, 1984).[pic]
Different Stages of Product Life Cycle
Each stage of PLC is related to passage of time (as the product of service grows older) hence all of them have different characteristics and implications. It is commonly acknowledged that the marketing strategy must be altered for each stage in the cycle to maximize opportunities and solve problems unique to the product’s phase in its life. The product goes through predictable stages in its life characterized by intensifying competition. Similarly marketing of a product also varies stage by stage.
In the introduction stage very high advertising expense/sales ratio is typical despite the potential for a skimming pricing strategy.
In the growth stage, advertising expenditures continue to be high as new competition enters the market.
However in the maturity stage service and packaging become significant as competition is intensified.
Depending on the exit barriers of the industry, the decline stage may lead to abandonment of the product by some marketers while those remaining may acquire the customers of the withdrawing firm. (Parzinger, Ramarappu and Timmerman, 1997).
In short, the Product Life Cycle concept provides a framework for thinking about both a product's evolution through time and the kind of market segments that are like to
Introduction: This paper aims at analysing the usefulness of the Product Life Cycle (PLC) concept to the marketers. It will describe the different stages of the PLC concept and their respective implications on the marketing mix and the strategies which can be adopted during the different phases.
Every new product right from its entrance in the market till its elimination from the market goes through a certain sequence of stages known as Product Life Cycle. There are four stages popularly addressed by the product life cycle which are: Introduction, growth, maturity and decline recognized as distinct stages in the sales history of a product (Kotler, 1984).[pic]
Different Stages of Product Life Cycle
Each stage of PLC is related to passage of time (as the product of service grows older) hence all of them have different characteristics and implications. It is commonly acknowledged that the marketing strategy must be altered for each stage in the cycle to maximize opportunities and solve problems unique to the product’s phase in its life. The product goes through predictable stages in its life characterized by intensifying competition. Similarly marketing of a product also varies stage by stage.
In the introduction stage very high advertising expense/sales ratio is typical despite the potential for a skimming pricing strategy.
In the growth stage, advertising expenditures continue to be high as new competition enters the market.
However in the maturity stage service and packaging become significant as competition is intensified.
Depending on the exit barriers of the industry, the decline stage may lead to abandonment of the product by some marketers while those remaining may acquire the customers of the withdrawing firm. (Parzinger, Ramarappu and Timmerman, 1997).
In short, the Product Life Cycle concept provides a framework for thinking about both a product's evolution through time and the kind of market segments that are like to
References: H.W. Fox, and D.R. Rink, Coordination of purchasing with sales trends, Journal of Purchasing and Materials Management, pp. 10-18, 1977 R