PLC

1. Lecture 14
Product Life Cycle

2. Product life cycle (PLC)
Different phases that a product passes in its lifecycle
A company's Marketing strategy must change as the product,
market, and competitors change over the PLC
To say that a product has a life cycle is to assert four things:
1. Products have a limited life.
2. Product sales pass through distinct stages, each posing different
challenges, opportunities, and problems to the seller.
3. Profits rise and fall at different stages of the product life cycle.
4. Products require different marketing, financial, manufacturing,
purchasing, and human resource strategies in each life-cycle stage.

3. Product Life-Cycle Stages
Product Life Cycle

4. Common Product Life-Cycle Patterns
This pattern, often characteristic of small
kitchen appliances such as handheld
mixers and bread makers.
--Sales grow rapidly when the product is
first introduced and
--then fall to a "petrified" level that is
sustained by late adopters buying the
product for the first time and early
adopters replacing the product.
This often describes the sales of
new drugs. The pharmaceutical
company aggressively promotes
its new drug, and this produces
the first cycle. Later, sales start
declining and the company gives
the drug another promotion
push, which produces a second
cycle (usually of smaller
magnitude and duration)
sales pass through a succession of
life cycles based on the discovery
of new-product characteristics,
uses, or users. The sales of nylon,
for example, show a scalloped
pattern because of the many new
uses—parachutes, hosiery, shirts,
carpeting, boat sails, automobile
tires—that continue to be
discovered over time.2

6. Chapter 9- slide 6
Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Three special categories of product life cycles-
Styles, Fashions, and Fads

7. Product Life-Cycle Strategies
• A style is a basic and distinctive mode of expression appearing in a field
of human endeavour. A style can last for generations, and go in and out of
vogue. Styles appear in
– homes (colonial, ranch, Cape Cod);
– clothing (formal, casual, funky); and
– art (realistic, surrealistic, abstract)
• A fashion is a currently accepted or popular style in a given field.
Fashions pass through four stages: distinctiveness, emulation, mass
fashion, and decline
• Fads are temporary periods of unusually high sales driven by consumer
enthusiasm and immediate product or brand popularity

8. 1. Product Life-Cycle Strategies- Introduction Stage
• Market Skimming Strategies
– Rapid Skimming (High Price, High Promotion)
– Slow Skimming (High Price, low Promotion)
• Market Penetration Strategies
– Rapid Penetration (Low Price, High Promotion)
– Slow penetration (Low Price, Low Promotion)

9. The Pioneer Advantage

10. • Improve product quality, add new features, and improve styling
• Add new models and flanker products
• Enter new market segments
• Increase distribution coverage
• Shift from product-awareness advertising to product-preference
advertising
• Lower prices to attract the next layer of price-sensitive buyers
2. Product Life-Cycle Strategies- Growth Stage

11. Stages in the Maturity Stage
Growth Stable
Decaying
maturity
3. Product Life-Cycle Strategies- Maturity Stage

12. a) Product Modifications
• Quality improvements
• Feature improvements
• Style improvements
3. Product Life-Cycle Strategies- Maturity Stage

13. Copyright © 2009 Dorling
Kindersley (India) Pvt. Ltd.
b) Marketing Program Modifications
Prices
Distribution
Advertising
Sales promotion
Services
3. Product Life-Cycle Strategies- Maturity Stage

14. Ways to Increase Sales Volume
• Convert nonusers
• Enter new market segments
• Attract competitors’ customers
• Have consumers use the product on more occasions
• Have consumers use more of the product on each occasion
• Have consumers use the product in new ways

15. • Maintain the product
• Harvest the product
• Drop the product
4. Product Life-Cycle Strategies- Decline Stage