Product Life Cycle

PRODUCT LIFE CYCLE STRATEGIES

PRODUCT =? A product means anything that can be offered to a MARKET for satisfying the needs of the customers .

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LEVELS OF A PRODUCT 

There are three levels of a product:  Core  Actual  Augmented

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Meaning of PLC The product life cycle refers to a period from the product’s first launch into the market until it’s final withdrawal and it is split up in phases.

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IMPORTANCE OF PLC  PLC concept highlights that sooner or later a product would die and management must develop new products to maintain sales revenue.  It can be used as a tool for business forecasting.  Provide a framework for sound marketing decisions in life cycle of product.  PLC points out the needs for periodic adjustments in marketing mix. 5

CATEGORIES OF PLC 1. FAD 2. FASHION 3. STYLE

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PLC STRATEGIES STRATEGY IS A LONG TERM PLAN OF ACTION DESIGNED FOR A DESIRED GOAL.PLC STRATEGIES CHANGES WITH EVERY STAGE OF PLC.

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PLC STAGES 1.Development stage 2.Introduction stage 3.Growth stage 4.Maturity stage 5.Decline stage 6. 8

Abandonment stage

GRAPH OF STAGES IN PLC

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DEVELOPMENT STAGE  It begins when the company finds and developed a new product idea.  Product undergoes several changes.  Product that survives test market is introduced in real market place.  Sales are zero.  Revenues are negative. 10

INTRODUCTION STAGE 1. product awareness 2. low sales volume 3. few competitors 4. Innovators 5. high cost per unit 6. negative profits 11

Strategies 1. Advertisements and publicity. 2. Attractive gifts. 3. Discount. 4. Removing deficiencies. 5. Skimming the cream pricing policy. 12

GROWTH STAGE 1. Maximize market share 2. Fast growth of sales 3. Growing competitors 4. Early less adopters 5. High cost per unit 6. Rising profits 13

Strategies 1.Heavy advertisements 2.Introducing new versions of the product 3.Distribution channels 4.Price at competitive levels 5. Customer services 14

MATURITY STAGE 1. Retain market share 2. Sales at peak level 3. Many competitors 4. Mass market 5. Lowest cost per unit 6. Highest profit 15

Strategies 1.Differentiating the product from competitive products 2.Brand image 3.Warranty period extended 4.Introducing reusable packaging 5.Developing new markets 6. New uses of the product 16

DECLINE STAGE 1. Aims at minimizing cost 2. Declining sales 3. Decreasing competitors 4. Only remaining “loyal” customers buy product 5. Low cost per unit 6. Low profit 7. Reduction in promotional expenditures 8. Distribution is done through basic channel of distribution and alternating channels are abandoned. 17

Strategies 1. New features may be added. 2. Economy models of packs may be introduced to revive market. 3. New and attractive packaging to customers. 4. Selective promotion may be adopted to reduce distribution cost. 18

ABANDONMENT OF PRODUCT  A product is being abandon in order to make better use of their resources.  E.g. Pepsi Gold

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ADVANTAGES OF PLC 1. Helps in effective product plan. 2. Management can take advance steps before the decline of the product. 3. Maximum profit stage(maturity) can be extended by finding new uses of product. 4. Innovations can be adopted to improve quality , features and design. 20

PROBLEM WITH PLC  In reality very few product follow such prescriptive cycle.  The decision of the marketers can change the stage for example it can go from introduction to decline. Not easy to tell which stage product is in

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Use of product Management for successful PLC Product management is a middle level management function that can be used- To manage a PLC.  Enables company to take decisions needed during each phases of PLC.  The moment of introduction and of withdrawal of a products defined by use of product management by a product manager.

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CONCLUSI ON

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COMPARISION OF CHARACTERISTICS OF PLC STAGES CHARACTERISTI INTRODUCTION CS

GROWTH

MATURITY

DECLINE

1.OBJECTIVE

PRODUCT AWARENESS

MAXIMISE MARKET SHARE

RETAIN MARKET SHARE

MINIMISE COSTS

2.SALES

LOW

FAST GROWTH

PEAK LEVEL

DECLINING

3.COMPETITORS

FEW

GROWING

MANY

DECREASIN G

4.PROFITS

NEGATIVE

RISING

HIGHEST

LOW

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COMPARISON OF STRATEGIES OF EACH PLC PHASE Basic Introduction Components PRODUCT

PRICE

Growth

OFFERS A BASICIMPROVEMEN DIVERSITY PRODUCT T UPGRADE BRANDS OF PRODUCT

HIGH PRICES

REDUCED PRICES

BUILD BUILD MORE DISTRIBUTION SELECTIVE SELECTIVE DISTRIBUTERS DISTRIBUTIO N 25

Maturity

HIGH

HIGH

Decline Phase PHASE OUT WEAK PRODUCTS

PRICE TO PRICES MATCH WITH ARE CUT COMPETITORS DOWN TO MAINTAIN SMALL PROFIT HIGH VERY CONCENTRATI SELECTIVE ON ON DISTRIBUTION VERY HIGH

GRADUAL

QUIZ =

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?

QUERIES

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