presentation for MBA Students to explain the characteristics of different stages of Product Life Cycle and the marketing strategies used according to that.

2. PRODUCT LIFE CYCLE
“The product life cycle is an attempt to recognize distinct stage
in the sales history of the product.” -Philip Kotler
“From its birth to death, a product exists in different stages
and in different competitive environments. Its adjustment to
these environments determines to great degree just
successful its life will be.”
– Willian J. Stanton
 Like a human being, Each product has to cross various stages in
its life. It involves five distinct stages: Product development,
Introduction, Growth, Maturity & Decline.
 Most product life cycle curves are portrayed as bell-shaped.
 After the decline stage, the product finally come to an end.

3. WHY A PRODUCT LIFE CYCLE?
A company should change its positioning and differentiation
strategy as the product, market and competitors change over
their strategies with the respective product life cycle(PLC).
When we say that a product has a life cycle we consider four
important things:
i. Products have a limited life.
ii. Products sales pass through distinct stages, each posing
different challenges, opportunities and problems to the
marketer.
iii. Profits rise and fall varies at different stages of the product life
cycle.
iv. Products require different marketing, financial, buying,
manufacturing, and human resource strategies in each life–
cycle stages.

4. USEFULNESS OF PRODUCT LIFE CYCLE
 As a Planning Tool
 As a forecasting tool
 As a control tool
 To decide for developing a new product

6. INTRODUCTION STAGE OF THE PLC
Sales
Costs
Cash Flow/Profits
Marketing Objectives
Product
Price
Very Low sales
High cost per customer
Negative or negligible
Create product awareness
and trial
Offer a basic product to meet
customer needs
Use cost-plus, High
Distribution Build selective distribution
Advertising Build product awareness among
early adopters and dealers
Market Expenditure High
Working Capital Moderate

7. MARKETING STRATEGIES FOR INTRODUCTION STAGE
 Use of Sales promotion schemes
 Focus on Early Adopters
 High pricing strategy to introduce new technology
 Penetration pricing strategy in case if the still
competition prevailing
 Reduce the time span

8. Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
High profits
Maximize market share
Offer product extensions,
service, warranty
Price to penetrate market, Lower
price
Distribution Build intensive distribution
Advertising Build awareness and interest
in the mass market
GROWTH STAGE OF THE PLC
Cash Flow Improving
Working capital
Improving

9. MARKETING STRATEGIES FOR GROWTH STAGE
 Price Reduction
 Improve product quality and styling; add new
product features
 New uses of the product
 More uses of the product
 Enter into new market segments
 Focus on “Early Majority”
 Increase promotional expenditures
 Reduce the prices to attract buyers
 Enter into new distribution channels

10. Sales
Costs
Profits
Marketing Objectives
Product
Price
Reasonable Sales
Moderate cost per customer
Stabilized or low profits
Differentiated products
Price to match or best
competitors
Distribution
Build more intensive
distribution
Market Expenditure Falling
MATURITY STAGE OF PLC
Maximized profits while
defending market share
Cash Flow Consistently high
Market Emphasis Brand Loyalty

11. MARKETING STRATEGIES FOR MATURITY STAGE
 Introduction of new products
 Intensive use of Advertisement and Sales
promotion Techniques
 Re-positioning of Brand
 Improve the quality of the product
 “Differential Advantage” Strategy
 Focus on “Late Majority”
 Product alteration and modification
 Creating New Buyers
 Increase the usage of product among the current
buyers

12. Sales
Costs
Profits
Marketing Objectives
Product
Price
Sales down
Low cost per customer
Declining profits or negative
Reduce expenditure and milk
the brand
Phase out weak items
Cut price
Distribution
Go selective: phase out
unprofitable outlets
Market Emphasis Selective Distribution
DECLINE STAGE OF PLC
Cash Flow Low
LowMarket Expenditure
Competitor Reduced Withdrawn

13.  Product Simplification Decision
 Selective Distribution
 Intensive Care Unit Treatment
 Abandon the product
 Pruning out unprofitable sizes and models to make
efficient product assortment
 Strategic Alliance
 Improve the functionality of the product
 Make production and marketing functioning efficient
MARKETING STRATEGIES FOR DECLINE STAGE

14. LIMITATIONS OF PRODUCT LIFE CYCLE
 Product don’t have predictable life and the specific life
cycle curves
 The life cycle of one product varies from the life cycle
of another product
 For all practical reasons PLC doesn’t exist
 PLC may be used as a descriptor not as a predictor
 It is very difficult to identify the factors which will affect
product’s movement in different stages
 It is very difficult to predict when the product moves to
next stage of PLC
 It is also very hard to identify at which stage of PLC the
product is in.