1. PRODUCT LIFE
CYCLE

2. DEFINITION
“ The stages through which the individual products
develop over a period of time is known as product
life cycle.”
 The product life cycle concept is derived from the
fact that a given product’s volume and revenue
follow a typical pattern of four –phases cycle.
This life cycle is the representative fact of the
existence of every product.
 If we plot a graph of sales volume versus time for
a product, generally, the PLC represents a bell-
shaped or s-shaped curve.

3. THE FOUR STAGES OF PRODUCT LIFE
CYCLE
Introduction
Growth
Maturity
Decline

4. PRODUCT LIFE
CYCLE
Sales and
Profits ($)
Sales
Profits
Time
Product Introduction Growth Maturity Decline
Develop-
ment
Losses/
Investments ($)

5. INTRODUCTION STAGE OF THE
PLC
Sales Low sales
Costs High cost per customer
Profits Negative
Create product awareness
Marketing Objectives and trial
Product Offer a basic product
Price Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers

6.  Example- 3rd generation Mobile Phones.
Marketing Strategy used in Introduction
Stages-
 Rapid Skimming- Launching the new product at
high price and high promotional level.
 Slow skimming- Launching the new product at
high price and low promotional level.
 Rapid Penetration-Launching of product at low
price with heavy promotion.
 Slow penetration- Launching the new product at a
low price and low level of promotion.

7. Growth Stage of the PLC
Sales Rapidly rising sales
Costs Average cost per customer
Profits Rising profits
Marketing Objectives Maximize market share
Offer product extensions, service,
Product warranty
Price Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the
mass market

8.  Marketing Strategy Used in Growth Stage:
 Improved product quality and add new product
features and styling.
 Add new models and products of different sizes,
color, shapes etc.
 Enter new market segments.
 Increase distribution coverage enter new
distribution channels.
 Shifts from product awareness to product
preference advertising.
 Lower prices to attract next layer of price
sensitive buyers.
 Examples- Hyundai-I10.

9. Maturity Stage of the PLC
Sales Peak sales
Costs Low cost per customer
Profits High profits
Marketing Objectives Maximize profit while defending
market share
Product Diversify brand and models
Price Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits

10.  Marketing Strategy Used in Maturity Stage:
2. Mar ket Modification-
 Converting non users.
 Entering new market segments.
 Win competitors customers.
 Redefine target market.
2. Product Modification-
 Quality Improvement.
 Adopting advance technology.
 Product Differentiation.

11. Decline Stage of the PLC
Sales Declining sales
Costs Low cost per customer
Profits Declining profits
Marketing Objectives Reduce expenditure and milk the brand
Product Phase out weak items
Price Cut price
Go selective: phase out unprofitable
Distribution outlets
Advertising Reduce to level needed to retain
hard-core loyal customers

12. MARKETING STRATEGY USED IN DECLINE
STAGES
 Increase the given firms investment to dominate
the market or strengthen its competitive
position.
 Maintaining the given firms investment level
until the uncertainties about the industry are
resolved.
 Decrease the firms investment selectively, by
dropping the unprofitable customers group, while
simultaneously strengthening the firms
investment niche segments.
 Harvesting the firms investment to recover cash
quickly.
 Divesting the business quickly by dropping off its
assets as advantageously as possible.

13. PLC CONCEPT IS BASED ON FOLLOWING
ASSUMPTIONS-
 Not all product introduced in the market essentially
pass through all stages of its life cycle. It is also
possible that the product may attain introduction
stage and then get phased out.
 There is no definite line of demarcation between the
various stages of product life cycle.
 At the same time, a product may be in different
stages of its life cycle in different segment of the
market. For example, the product concerned may be
in the introduction stage in Asian market while facing
decline in western countries.
 The time span of each stage in product life cycle in
respect of each product may vary. Thus, a product
may experience longer period in growth stage and
relatively short period in maturity stage.