Product life cycle

It is process of a product’s sales and profits that take over its lifetime. it has change

quickly because of changing is useful framework to describe how products and markets

work. By using PLC concept, it can forecast how product performance. Meanwhile it is

also developing marketing strategy that can difficult because strategy can cause and

result of the product life cycle.

The curve of PLC is normally S-shaped and breaks down product sales over time into

four discrete segments: introduction, growth, maturity and decline.

In the introduction stage, company usually sells their products at a high price in

price skimming strategy in order to recover their research and development expenses. It

will be a negative sale as well as in profit negative.

The sales growths are usually low at this stage because the product are lacking of

customers awareness. This is because the competition is less. In order to create

awareness, an aggressive advertising and promotions are required. In place, one or two

outlets are enough. People buy the product at this stage are usually high-risk takers and

can afford to pay high price. This group of people is known as innovators.

The prices can be high or low depending on the entry strategy of the firms marketing
the product. There are 2 choices, mainly related to price skimming or entering with a high
price and creating a narrow market. In the penetration, entering with a low price to build
market share and create broad market.
Skimming strategies are employed by technology-based products where prices
are expected to fall due to the technology become cheaper over time and obtain
customers most like to buy early.
There are strategic advantages to being first in the market and establishing a strong
position; consistent with penetration strategy. The 1st entrant has an advantages which
called 1st mover advantages that it tends to maintain its lead through PLC. As the early
access to the distribution channels, locking in the customers for products where switching
costs are high and products where strong network effects are where the value of the
product to customers, increase the no. of buyer. As they establishes awareness of its
product.
 In the growth stage is a rapid market that acceptance and able to increase profit as
the sales increase and the competition getting more.
In product, add more features and more model into the products. In the prices, try to
maintain and go by the markets. In promotion, try to create branding. And in place,
increase more outlets.
It is already in the market and receiving positive response. It wills more aggressive
advertising and promotions activities are required to boost sales. As boost sales can
increase the market very faster. Early adopters are the consumers who willing to pay a
relatively high price for the product but would prefer to wait a bit longer to make
purchase until it is proven by the innovators.
Marketing strategies-- This stage encompasses 2 different kinds of market behavior
either early or late growth in which rapid increase the sale that begins to flatten out.
However, the growth has several features.
First, no. of competitors is increasing. This cause to put pressure on marketing
managers to keep distribution channels and changes the focus of sales as well as
communications to emphasize competitive advantages. As customers become more
knowledgeable about the product as well as available options to choose, then they put
more pressure on the pricing. Finally , with an increase of competitors and market
segmentation begins to be a key issue.
The strategic option is relate to the product’s position in the market; whether it is a
leader with the leading market share or the follower. The leader can choose to fight to
keep the leadership position or it can flee, ceding market leadership to another product.
If the leader chooses to fight, then have to attempt to simply maintain the current
position or to keep enhancing the products and services.
If leader choose to flee, it is a possible that the new entrant in the market are too
strong and increasing the stakes for competing to a level the incumbent cannot sustain.
An exit is an option. This implies an attempt to repositioning the products so that it
can be a strong no. 2 or no. 3 brands.
 In the maturity stage ,companies may choose to lower their retailing prices after

they have recover their R&D investment in order to attract the critical mass of the market

to buy their products. Promotional activities become increase at this stage because

customers buy products tend to be attractive by the various kinds of incentives offered by

the retailers. As well the manufacturers are expected to keep the highest profit as ne cost

of production goes down and demand of the product increased many times.

In this stage, sales begin to drop and then more competition. In product, repackaging

and repositioning is needed. Meanwhile it can lower the price and sales promotion. To

make more outlets.

Marketing strategies--This stage is characteristic of most products, particularly

consumer products and services. The products exhibiting fierce battles for market share,

access to distribution channel, large amounts of money spent on trade and consumers’

promotion and competitive pricing policies.

The sales curve has flattened out; few new buyers are in the market. As market
potential is usually remain but it is difficult or expensive to reach those non-buyers.
Customers are sophisticated and well in the product features and benefits.
The strategies are similar to the growth markets; they depend on the relative market
position of the product. However, leaders look at the time horizon for cashing out the
product. To the committed the product for extended the time period, the objective is to
invest enough money to maintain the share.
A short-term objective is harvest the product by its objective of gradual share decline

with minimal investment to maximize the short-run profits. To harvest the product, no. 1

position may left open for aggressive no. 2 brand

 In the decline stage is where the sales and profit has decreasing. This is because of

the diminishing demand of a company’s product. If the company has no intention to keep

the product due to high maintenance cost, it can be withdrawn from the market.

In this stages, sales decrease more and competition exit. In product. It can keep those

products those earn profit and then drop those that they do not earn profit. In price, it can

maintain the pricing or increase in high pricing. It is fine to have less promotion and

outlets can be less as well .

As the market is in decline. Most strategies are reviving the mature markets also can
be used to revive declining markets.
If the market is truly dying, it can be very profitable to be last iceman. By being last,
the product can gain monopoly right to the remaining customers which will resulting in
the ability to charge the high prices.

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INTRODUCTION GROWTH MATURITY DECLINE

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 In the introduction, company must choose to launch a strategy consistent with a

intended product positioning. Money is needed to attract its distributors as well as to

build their inventories and to inform consumers of a new product. In the growth,

company continues to educate potential consumers and distributors. In addition, company

will sustain the rapid market growth by improving its quality, features, model and also

lowering prices at the right times to attract new buyers. In the maturity , they will

continue to invest in maturing product and consider to modify the market , product and

marketing mix . the decline, it will have to maintain the brand without change, hope that

competitors will drop out of the market; harvest the product, reducing costs and maintain

sales.