Product Life Cycle
MARKETING THROUGH THE PRODUCT LIFE CYCLE
A company’s positioning and differentiation strategy must change as the product, market and competitors change over time. Due to this, a product is assumed to follow the concept of the product life cycle (PLC). Kotler (2000) say that a product has a life cycle is to assert four things: Products have a limited life; product sales pass through distinct stages with different challenges, opportunities, and problems for the seller; profits rise and fall at different stages of the product life cycle; and products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage. This PLC curve is typically divided into four stages:
i. Introduction: A period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses incurred with product introduction. ii. Growth: A period of rapid market acceptance and substantial profit improvement. iii. Maturity: A period of a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition. iv. Decline: The period when sales show a downward drift and profits erode.
In the Kenyan market like any other market, most products follow the product life cycle. Therefore, companies need to develop appropriate marketing mix strategies to adopt in each stage of the given product so as to overcome the challenges faced by the company in the market to achieve competitive advantage.
Introduction Stage
With the introduction of Nuru bar soap in the market by Bidco Company, it will take time to roll out the product, sales growth tend to be slow and profits are expected to be negative or low at this stage. Some of the causes for the slow growth are: delays in obtaining adequate distribution through retail outlets, and customer reluctance to change established behaviors. Profits are low in this
A company’s positioning and differentiation strategy must change as the product, market and competitors change over time. Due to this, a product is assumed to follow the concept of the product life cycle (PLC). Kotler (2000) say that a product has a life cycle is to assert four things: Products have a limited life; product sales pass through distinct stages with different challenges, opportunities, and problems for the seller; profits rise and fall at different stages of the product life cycle; and products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage. This PLC curve is typically divided into four stages:
i. Introduction: A period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses incurred with product introduction. ii. Growth: A period of rapid market acceptance and substantial profit improvement. iii. Maturity: A period of a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition. iv. Decline: The period when sales show a downward drift and profits erode.
In the Kenyan market like any other market, most products follow the product life cycle. Therefore, companies need to develop appropriate marketing mix strategies to adopt in each stage of the given product so as to overcome the challenges faced by the company in the market to achieve competitive advantage.
Introduction Stage
With the introduction of Nuru bar soap in the market by Bidco Company, it will take time to roll out the product, sales growth tend to be slow and profits are expected to be negative or low at this stage. Some of the causes for the slow growth are: delays in obtaining adequate distribution through retail outlets, and customer reluctance to change established behaviors. Profits are low in this
References: Harrigan, K. R. Strategies for declining businesses. Unpublished doctoral dissertation, Harvard Uni-versity, 1979. Philip Kotler & Kevin Keller (2000), Marketing Management, 13th edition, Prentice Hall. Robert D. Buzzell, “Competitive Behavior and Product Life Cycles,” in New Ideas for Successful Marketing, eds. John S. Wright and Jack Goldstucker (Chicago: American Marketing Association, 1956), p. 51.