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Product Life Cycle
Product life cycle is a business analysis that attempts to identify a set of common stages in the life of commercial products. In other words the ‘Product Life cycle’ PLC is used to map the lifespan of the product such as the stages through which a product goes during its life span.
Product life cycle is the course of a product’s sales and profits over time.
Product life cycle (PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures.
The five stages of each product lifecycle are product development, introduction, growth, maturity and decline.
A company’s positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle(PLC)
When we say that a product has a life cycle we assert four things:
The Product Life Cycle (PLC) has Five Stages
Product development
During the growth stage, the firm uses several strategies to sustain rapid market growth.
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| Graph of Product Life Cycle |
Product life cycle (PLC) deals with the life of a product in the market with respect to business or commercial costs and sales measures.
The five stages of each product lifecycle are product development, introduction, growth, maturity and decline.
A company’s positioning and differentiation strategy must change as the product, market, and competitors change over the product life cycle(PLC)
When we say that a product has a life cycle we assert four things:
- Products have a limited life.
- Products sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller.
- Profits rise and fall at different stages of the product life cycle.
- Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life – cycle stages.
The Product Life Cycle (PLC) has Five Stages
- Product Development,
- Introduction,
- Growth,
- Maturity,
- Decline
- Fads
- Styles
- Fashions
- Product class (soft drinks)
- Product form (diet colas)
- Brand (Diet Dr. Pepper)
Product development
- Begins when the company develops a new-product idea
- Sales are zero
- Investment costs are high
- Profits are negative
- Low sales
- High cost per customer acquired
- Negative profits
- Innovators are targeted
- Little competition
- Rapidly rising sales
- Average cost per customer
- Rising profits
- Early adopters are targeted
- Growing competition
During the growth stage, the firm uses several strategies to sustain rapid market growth.
- Improves product quality and adds new features and improved styling.
- Adds new models and flanker products(i.e., products of different sizes, flavors, and so forth that protect the main product).
- It enters new market segments
- It increases its distribution coverage and enters new distribution channels.
- It shifts from product- awareness advertising to product- preference advertising.
- It lowers price to attract the next layer of price – sensitive buyers.
Maturity
Three potentially useful ways to change the course for a brand are market, product, and marketing program modification.
Market Modification
Trying to stimulate sales by modifying the product’s characteristics through
Quality improvement:
Aims at increasing the product’s functional performance.
Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh
Feature improvement
Aims at adding new features, such as size, weight, materials, additives, and accessories, that expand the product’s performance, versatility, safety, or convenience.
Style improvement
Aims at increasing the product’s esthetics appeal.
Eg; New car models, New Coke
- Sales peak
- Low cost per customer
- High profits
- Middle majority are targeted
- Competition begins to decline
Three potentially useful ways to change the course for a brand are market, product, and marketing program modification.
Market Modification
- Sales volume = no. of brand users * usage rate per user.
- Expand the no. of brand users
- Convert nonusers
- Enter new market segments
- Attract competitors’ customers
- Increase the usage rate among users
- Have consumers use the product on more occasions.
- Have consumers use more of the product on each occasion
- Have consumers use the product in new ways.
Trying to stimulate sales by modifying the product’s characteristics through
Quality improvement:
Aims at increasing the product’s functional performance.
Eg: Aashirvaad, Annapoorna, Pillsbury, Naturefresh
Feature improvement
Aims at adding new features, such as size, weight, materials, additives, and accessories, that expand the product’s performance, versatility, safety, or convenience.
Style improvement
Aims at increasing the product’s esthetics appeal.
Eg; New car models, New Coke
Decline:
- Increase investment
- Resolve uncertainties - stable investment
- Selective niches
- Harvesting
- Divesting
- To establish a system for identifying weak products.
- Some firms’ abandon declining markets earlier than others.
Limitations of Product Life Cycle (PLC)
Product life cycle is criticized that it has no empirical support and it is not fruitful in special cases. Different products have different properties so their life cycle also vary. It shows that product life cycle is not best tool to predict the sales. Sometimes managerial decisions affect the life of products in this case Product Life Cycle is not playing any role. product life cycle is very fruitful for larger firms and corporations but it is not hundred percent accurate tool to predict the life cycle and sales of products in all the situations.
Product life cycle is criticized that it has no empirical support and it is not fruitful in special cases. Different products have different properties so their life cycle also vary. It shows that product life cycle is not best tool to predict the sales. Sometimes managerial decisions affect the life of products in this case Product Life Cycle is not playing any role. product life cycle is very fruitful for larger firms and corporations but it is not hundred percent accurate tool to predict the life cycle and sales of products in all the situations.
