Product life cycle &

Marketing Strategies

Why a product life cycle?

A companys 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:
i. Products have a limited life.
ii. Products sales pass through distinct stages, each posing different
challenges, opportunities and problems to the seller.
iii. Profits rise and fall at different stages of the product life cycle.
iv. Products require different marketing, financial, manufacturing,
purchasing, and human resource strategies in each life cycle
stages.

Product Life Cycle

product life cycle is the course of a products
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.

Product Life Cycle

Sales and
Profits

Sales

Profits

Product
Development

Introduction

Growth

Maturity

Time
Decline

Sales and Profits Over the Products Lifetime

Introduction Stage of the PLC

Summary of Characteristics, Objectives, & Strategies
Sales
Sales

Low
Low

Costs
Costs

High
High cost
cost per
per customer
customer

Profits
Profits

Negative
Negative

Marketing
Marketing Objectives
Objectives

Create
Create product
product awareness
awareness and
and trial
trial

Product
Product

Offer
Offer aa basic
basic product
product

Price
Price

Use
Use cost-plus
cost-plus formula
formula

Distribution
Distribution

Build
Build selective
selective distribution
distribution

Promotion
Promotion

Heavy
Heavy to
to entice
entice product
product trial
trial

Growth Stage of the PLC

Summary of Characteristics, Objectives, & Strategies
Sales
Sales

Rapidly
Rapidly rising
rising

Costs
Costs

Average
Average cost
cost per
per customer
customer

Profits
Profits

Rising
Rising

Marketing
Marketing Objectives
Objectives

Maximize
Maximize market
market share
share

Product
Product

Offer
Offer extension,
extension, service,
service, warranty
warranty

Price
Price

Penetration
Penetration strategy
strategy

Distribution
Distribution

Build
Build intensive
intensive distribution
distribution

Promotion
Promotion

Reduce
Reduce to
to take
take advantage
advantage of
of demand
demand

Maturity Stage of the PLC

Summary of Characteristics, Objectives, & Strategies
Sales
Sales

Peak
Peak

Costs
Costs

Low
Low cost
cost per
per customer
customer

Profits
Profits
Marketing
Marketing Objectives
Objectives

High
High
Maximize
Maximize profits
profits while
while defending
defending market
market share
share

Product
Product

Diversify
Diversify brand
brand and
and models
models

Price
Price

Match
Match or
or best
best competitors
competitors

Distribution
Distribution

Build
Build more
more intensive
intensive distribution
distribution

Promotion
Promotion

Increase
Increase to
to encourage
encourage brand
brand switching
switching

Decline Stage of the PLC

Summary of Characteristics, Objectives, & Strategies
Sales
Sales

Declining
Declining

Costs
Costs

Low
Low cost
cost per
per customer
customer

Profits
Profits

Declining
Declining

Marketing
Marketing Objectives
Objectives

Reduce
Reduce expenditures
expenditures and
and milk
milk the
the brand
brand

Product
Product

Phase
Phase out
out weak
weak items
items

Price
Price

Cut
Cut price
price

Distribution
Distribution

Selective:
Selective: phase
phase out
out unprofitable
unprofitable outlets
outlets

Promotion
Promotion

Reduce
Reduce to
to minimum
minimum level
level

Four Introductory
Marketing Strategies
High

Promotion

Low

High

RapidRapidskimming
skimming
strategy
strategy

SlowSlowskimming
skimming
strategy
strategy

Low

RapidRapidpenetration
penetration
strategy
strategy

SlowSlowpenetration
penetration
strategy
strategy

Price

Marketing Strategies:
Introduction Stage

Product Offer a basic product

Price Use cost-plus basis to set
Distribution Build selective distribution
Advertising Build awareness among early
adopters and dealers/resellers
Sales Promotion Heavy expenditures to
create trial

Marketing Strategies:
Growth Stage
Product Offer product extensions, service,
warranty
Price Penetration pricing
Distribution Build intensive distribution
Advertising Build awareness and interest
in the mass market
Sales Promotion Reduce expenditures to
take advantage of consumer demand

Marketing strategies for Growth stage

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 productpreference advertising.
It lowers price to attract the next layer of price sensitive
buyers.

Marketing strategies for Maturity

stage
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

Continued..
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.
Product modification
Trying to stimulate sales by modifying the
products characteristics through

Continued..
Quality improvement:
Aims at increasing the products 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 products
performance, versatility, safety, or convenience.
Style improvement
Aims at increasing the products esthetics appeal.
Eg; New car models, New Coke

Marketing Strategies:
Maturity Stage
Product Diversify brand and models
Price Set to match or beat competition
Distribution Build more intensive
distribution
Advertising Stress brand differences and
benefits
Sales Promotion Increase to encourage
brand switching

Strategies for Decline Stage

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.

Thank You