DR.

DY PATIL INSTITUTE
OF MANAGEMENT AND
RESEARCH,PIMPRI
DEPARTMENT OF M.B.A
 The product life-cycle theory is an economic
theory that was developed by Raymond
Vernon in 1966.

Presentation On :
Product Life Cycle Process
 Product Life Cycle (PLC)

• Just as people go through infancy, childhood, adulthood and old

age, so too do products and brands. And just as we swing from
being needy, to being overall contributors to our families or to
society, and then back to being needy again over the course of our
lives, so – in effect – do products.
 The four phases usually used to describe a product's life cycle are:
1) Introduction.
2) Growth.
3) Maturity.
4) Decline.
 PLC Goals
• The goals of Product Life Cycle management (PLM) are to reduce time to
market, improve product quality, reduce prototyping costs, identify potential
sales opportunities and revenue contributions, and reduce environmental
impacts at end-of-life.

• To create successful new products the company must understand its

customers, markets and competitors. Product Lifecycle Management (PLM)
integrates people, data, processes and business systems.

• It provides product information for companies and their extended supply

chain enterprise. PLM solutions help organizations overcome the increased
complexity and engineering challenges of developing new products for the
global competitive markets
 Stages and it’s Characteristics

I. Market introduction stage:

A. Costs are very high

B. Slow sales volumes to start
C. Little or no competition
D. Demand has to be created
E. Customers have to be prompted to try the product
F. Makes little money at this stage
 Strategies Across Stages of Product Life Cycle

• According to P. Kotler , Management can pursue one

of the four strategies on the basis of high low price
and promotion.
 2.Growth Stage:

A. Costs reduced due to economies of scale

B. Sales volume increases significantly
C. Profitability begins to rise
D. Public awareness increases
E. Competition begins to increase with a few new players in
establishing market
F. Increased competition leads to price decreases
 3. Maturity stage:

A. Costs are decreased as a result of production volumes increasing and

experience curve effects
B. Sales volume peaks and market saturation is reached
C. Increase in competitors entering the market
D. Prices tend to drop due to the proliferation of competing products
E. Brand differentiation and feature diversification is emphasized to maintain
or increase market share
F. Industrial profits go down
 4.Decline Stage:

A. Costs become counter-optimal

B. Sales volume decline
C. Prices, profitability diminish
D. Profit becomes more a challenge of production/distribution efficiency
than increased sales
Identifying PLC stages :
Product Life Cycle of LUX
 Introduction to LUX
1960 LUX went
Colored

1929 LUX
Launched in INDIA

1925 LUX
Launched in USA
as Toilet Soap

1916 LUX launched in

USA as Laundry Shop
Product Life Cycle
Introduction Stage(1929-1950s)
Growth Stage-(1950s-1990s)
Maturity Stage-(1990s to till date)