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Product life cycle is a business analysis that attempts to identify a set of common stages in the life of commercial products. In other words the 'Product Life cycle' PLC is used to map the lifespan of the product such as the stages through which a product goes during its lifespan.
The stages of a product's life cycle can be classified as follows:
- Low and slow stage: The product sales are the lowest and move up very slowly at snail's pace
- Highest promotional Stage: During this period of introduction or the development, promotional expenses bear the highest proportion of sales."The product's costs rise sharply as the heavy expense of advertising and marketing any new product begins to take its toll."
- Highest Product prices:Lower input and sales absorbing fixed costs.
- Once the market has accepted the product,sales begin to rise.This is most crucial stage and help the brand to establish in the market.
- Market becomes saturated because, the house hold demand is satisfied and distribution channels are full.By now the product is widely accepted and growth slows down. Before long, however, a successful product in this phase will come under pressure from competitors. The producer will have to start spending again in order to defend the product's market position.
- Sooner or later actual sales begin to fall under the impact of new product competition and changing consumer tastes and preferences.
- A company will no longer be able to fend off the competition, or a change in consumer tastes or lifestyle will render the product #:redundant. At this point the company has to decide how to bring the product's life to an end.
- The product life cycle is an important concept in marketing. It includes four stages that a product goes through from when it was first #:thought of until it is eliminated from the industry. Not all products reach this final stage. Some continue to grow and others rise and fall.
Stages of Product Life Cycle Can Vary in Length: "Branded product life cycles vary in length and shape. Product category and product form life cycles also possess degrees of variability, depending on the type of product under consideration. One extreme is the very short life cycle associated with the product fad. Fads move almost immediately into the growth stage of the PLC. Some fads possess significant residual markets that keep them around for a while, but even these products move fairly rapidly into and through decline." Fads: "A temporary fashion with a short life cycle (Hula Hoop, Frisbee, Wristbands) Some products can have extremely long maturity phases, but others may have very long introductory phases. It may take some products a substantial amount of time to catch on in the market before they enter their growth phases. These products have been referred to as "high learning products." These products often are complex to understand or use, may be extremely expensive, may not be easy to sample before committing to purchase, or may not be compatible with existing social values." (courcesunt.edu). "There are five different product adoption groups during the product's life cycle 1.Innovators-well-informed customers who are able to try unproven product 2.Early adopters-usually educated opinion leaders 3.Early majority-careful consumers, who tend to avoid risk 4.Late majority-somewhat skeptical customers 5.Laggards-those who avoid change The rate of adoption depends on many factors and correlated with the product life cycle."
The establishment stage is characterized by low growth rate of sales as the product is newly launched in the market. Monopoly can be created, depending upon the efficiency and need of the product to the customers. Firms usually incur losses rather than profit turning this stage. If the product is in the new product class, the users may not be aware of its true potential. In order to achieve that place in the market, extra information about the product should be transferred to consumers through various media.The stage has the following characteristics:
- 1. Low competition.
- 2. Firm mostly incurs losses and not profit.
- 3. Promotion goes highs.
When a new product is introduced, market gain tends to be very slight. Marketing costs may be high, and it is unlikely that there are any profits.
The Growth stage is where your product starts to grow. In this stage a very large amount of money is spent on advertising. You want to concentrate on telling the consumer how much better your product is than your competitors' products.Growth comes with the acceptance of the innovation in the market and profit starts to flow. If the monopoly exists, companies can experiment with new ideas and innovation in order to maintain the sales growth.The growth stage exhibits a rapid increase in both sales and profits, and this is the time to try and increase your product's market share.
The third stage in the Product Life Cycle is the maturity stage. If your product completes the Introduction and Growth stages then it will spend a great deal of time in the Maturity stage. During this stage sales grow at a very fast rate and then gradually begin to stabilize. The key to surviving this stage is differentiating your product from the similar products offered by your competitors. Due to the fact that sales are beginning to stabilize you must make your product stand out among the rest. Aggressive competition in the market results in profits decreasing at the end of the growth stage thus beginning the maturity stage. In addition to this, the maturity stage of the development process is the most vital.
The decline stage is where most of the product class usually dies due to low growth rate in sales. A number of companies share the same market, making it difficult for all entrants to maintain sustainable sales levels. Not only is the efficiency of the company an important factor in the decline, but also the product category itself becomes a factor, as the market may perceive the product as "old" and may not be in demand. It is not always necessary that a product should go through these stages. it depends on the type of product, its competitors, scope of the product, etc. and free from tax perks.
The duration of each life cycle phase can be controlled, to some extent. The phase that can be controlled in particular is the maturity phase, in which steps can be taken to ensure that it lasts longer than what it initially was going to. Some of the known tactics used in extending the maturity phase are: • by adding or updating the features of a particular product. • by using different pricing approaches to attract consumers that use a different brand. • by advertising to encourage people that have never used a product in the category to try it and therefore gain new customers.
1) MBA. (2013). Product Life Cycle. Retrieved from
2) Mind Tools. (2013). The Product Life Cycle: Managing your Product to Maximize Success
3) Quick MBA. (2010). The Product Life Cycle. Retrieved from
6) (Philip Kotler, "Marketing Management: Analysis, Planning, Implementation and Control", 9th Ed.(Upper Saddle River, NJ: Prentice- Hall,cocourses.unt.edu).
7) Free MBA Notes (India)