Managing Product Life

Cycle

Dr. Tapan K. Panda

At the end of this chapter you will be able to understand:
 The concept of product life cycle

 Stages of product life cycle

 Marketing decisions at different levels of product life cycle

 Use of product life cycle concept in product management and decision-making

Structure of the Chapter
 Introduction

 Levels of productivity life cycle

 Shapes of product life cycle

 Concept of product life cycle

 Strategic considerations in product life cycle

 Marketing strategies and product life cycle

 Strategies for Life Cycle Stages

 Guidelines for formulation and implementation of marketing strategy

 Reasons for Changes in Product Life Cycle Patterns

 Conclusion

 Questions
Introduction:

Quantity Introduction Growth Maturity Decline

0 Time

A
A Typical
Typical Product
Product Life
Life Cycle
Cycle
 Levels of Productivity Life Cycle:

Demand for Multiple

Copies of Documents

Demand for Photocopying

Sales

Demand for Cyclostyling

Demand for Carbon Copying

Time
 Shapes of Product Life Cycle:

Sales Sales Sales

Time Time Time

Classical
Classical Bell
Bell Shaped
Shaped PLC
PLC A
A Pattern
Pattern of
of Style
Style A
A Pattern
Pattern of
of Fashion
Fashion

Sales Sales Sales Sales

Time Time Time Time

Growth-slump-
Growth-slump- maturity
maturity patterns
patterns A
A Pattern
Pattern of
of Fad
Fad
Concept of Product Life Cycle:

Extended
Extended Product
Product Life
Life Cycle
Cycle
Concept of Product Life Cycle:

PLC Elements Introduction Growth Maturity Decline

CHARACTERISTICS

1. Sales Low Fast Growth Slow Growth Declining

2. Profits Negligible Peak Level Declining Low

3. Cash inflow Negative Moderate High Low

4. Competitors Few Growing Many Declining

5. Customers Innovative Mass Market Mass Market Laggards

Strategic Considerations in Product Life Cycle:

Competition

Overall Strategic Focus

Profit

Distribution Strategies

Advertising Strategies
 Marketing Strategies and Product Life Cycle:
Effects and
Introduction Growth Maturity Decline
Responses
Characteristics of the Stage
Consumers Innovators Early adopters Middle Majority Laggards
Few, hence less Growing in numbers, Stable, intense
Competitors Declining, shakeout
important and followers competition
Sales will be growing
Sales Low sales Stagnating sales Declining sales
rapidly
Low cost due to Low cost per
Costs High cost per consumer Cost starts declining
higher volume consumer
Marketing Objectives
Establishment in the
Market penetration:
market: Creating Defined the market Cost cutting, Milking
  Increasing market
product awareness and shares, brands the products
share
trial
 Marketing Strategies and Product Life Cycle:
Effects and
Introduction Growth Maturity Decline
Responses
Marketing Strategies
Diversification of Divesting weak
Product Basic product offering Augmenting products
brands and models products
Building distribution Retention of higher Unprofitable ones are
Distribution Intensive distribution
selectively shelf space phased out
What consumers can
High, cost plus to
Price to penetrate the bear and best
Price recover the cost of Low price
market competitors are
introduction
offering
Building awareness
especially targeted Stress on brand Reduced just to retain
Advertising Mass communication
innovators and differences loyal consumers
distribution channels
High to build loyal
Sales Promotion High to increase trials Moderate Low
consumers
 Strategies for Life Cycle Stages:

Marketing Strategies at
Maturity Stage

Marketing Strategies at
Growth Stage
Marketing Strategies at
Decline Stage

Marketing Strategies at
Introduction Stage
Guidelines for formulation and implementation of marketing strategy:
Reasons for Changes in Product Life Cycle Patterns:

Increased Customer Awareness

Higher Disposable Income

Life style changes

Change in Consumer’s need structure

Increased Competition

Emergence of newer category

Changes in Technology

Social System
Conclusion
Questions
Explain the concept of productivity life cycle as a measurement tool for
marketing success.

Explain what precaution a marketer should take for not allowing a

product to enter into the decline stage? How different is your suggestion
for (1) fast moving consumer good and (2) consumer durable.

Select five multi national brands in Indian market which entered into
decline stage but subsequently repositioned to extend their life cycles