Product life cycle

PLC

Products have a limited life

Product sales pass through distinct
stages
Profits rise and fall at different stages
of the PLC
Product require different strategies in
each stage of the PLC

Sales

Stage of PLC

Product Life Cycle

Growth

Maturity
Decline

Introduction

Time

Product development.
Introduction.
Growth.
Maturity.
Decline.

Product may not pass through all the

five stages.
A product may be developed,introduced
& then withdrawn from the market.
A relaunched product will have new life
cycle.

Introduction stage.

At this stage sales is low, promotional

expenditure is high ,profit is negligible
or product may not earn any profit at
all.

Strategies for Introduction

stage.

Rapid Skimming.
Slow Skimming.
Rapid Penetration.
Slow Penetration.

Rapid Skimming

Marketer launches the product at

higher price & higher promotional level
to skim the market rapidly.
The strategy is more successful when a
large part of potential market is
unaware of the product.
The firm tries to build brand
preferences.

Slow Skimming

In this product is launched at higher

price & at low promotional level.
This strategy is feasible when market is
aware of the product,the market size is
limited,competition is not intense&
customers are ready to pay higher
price.

10

Rapid Penetration.

In this product is launched at at lower

price with heavy promotion.
This strategy is applied when market is
large in size ,customer are unaware of
the product,they are more price
sensitive,competition is high.

11

Slow Penetration.

In this product is launched at lower

price & low level of promotion.

12

Growth Stage.

Rapid Growth in sales.

Rise in profits.
Competition may increase.
Unit manufacturing cost falls.

13

Strategies for growth stage.

Price cut to attract price sensitive

customer.
Introduction of more product features
and models.
Introduce new marketing channels
Enter new markets.

14

Maturity.

Stagnation of sales that is sales growth

rate slows down.
The reason could be introduction of
new product/substitutes,increase
competition.

15

Strategies for Maturity stage.

Product Modification.
Increase advertising and sales
promotion
Attractive promotional scheme.
Exit from unprofitable market areas.
Invest more in R & D
New packaging and product re-launch

16

Decline Stage.

During decline stage of PLC sales of a

product falls rapidly.
The reson could be technological
advances,increase in competition,shift's
in consumer's taste & preferences.

17

Strategy for decline stage.

Reduce unprofitable products from

product line
Cut down promotional budgets and
prices
Cut down unprofitable distributors
Reinvent the brand to make it more
appealing.
Divest the business through disposal of
asset.

18

Limitations of PLC Concept

Sales of some products rise or decline

quickly at the same rate.

Increase in marketing activities may alter

the shape of PLC curve

PLC outlines the phases but does not give

any indication to their duration.