PRODUCT LIFE-CYCLE

STRATEGIES

Prof. Kaleem Mohammed Khan

Department of Business Administration

Faculty of Management Studies & Research
Aligarh Muslim University, Aligarh

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 Introduction
• After launching the new product, management wants the
product to enjoy a long and happy life.

• Although it does not expect the product to sell forever, the

company wants to earn a decent profit to cover all the effort
and risk that went into launching it.

• Management is aware that each product will have life cycle,

although the exact shape and length is not known in
advance.

• A typical Product life cycle (PLC), the course that a

product’s sales and profits take over its lifetime. The
product life cycle has five distinct stages:

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 Stages of PLC
1. Introduction is a period of slow sales growth. Profits are
nonexistent because of the heavy expenses of product
introduction.
2. Growth is a period of rapid market acceptance and increasing
profits.
3. Maturity is a period of slowdown in sales growth because the
product has achieved acceptance by most potential buyers.
Profits level off or decline.
4. Decline is the period when sales fall off and profits drop.
 Not all products follow this product life cycle. Some products
are introduced and die quickly; others stay in the mature
stage for a long, long time. Some enter the decline stage and
are then cycled back into the growth stage through strong
promotion or repositioning.

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 Product Life Cycle

• Growth slows
Sales and profits ($) • Longest stage
(or losses/investment) • Rapid growth
• Most marketing
• Competition
management • Not inevitable
Rs Sales activity  Revive?
0  Reposition?
• Slow growth Profits

Time
Product Introduction Growth Maturity Decline
Development

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 Three Concepts of PLC
• The PLC concept can be described in terms of a product class (Car),
a product form (Sedan), or a brand (the Ford Fiesta).

• Product classes have the longest life cycles-the sales of many

product classes stay in the mature stage for a long time. Product
forms, in contrast, tend to have the standard PLC shape.

• A specific brand’s life cycle can change quickly because of changing

competitive attacks and responses.

• The PLC concept also can be applied to what are known as styles,
fashions, and fads. A style is a basic and distinctive mode of
expression.

• A fashion is a currently accepted or popular style in a given field.

• Fads are fashions that enter quickly, are adopted with great zeal, peak
early, and decline very quickly.

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 Different Forms of Product Life-Cycles

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Introduction Stage of the PLC

Summary of Characteristics, Objectives, & Strategies

Sales Low sales
Costs High cost per customer
Profits Negative
Marketing Build product awareness and stimulate
Objectives trial
Product Offer a basic product
Price Usually is high
Distribution Built selective distribution, high cost
Advertising and Build awareness among early adopters,
Sales Promotion secure distribution, entice trial 7
 Growth Stage of the PLC
Summary of Characteristics, Objectives, & Strategies

Sales Rapidly rising sales

Costs Average cost per customer
Profits Rising profits
Marketing Maximize market share
Objectives
Product Offer product extensions, new services,
new features
Price Price to penetrate market
Distribution Increase number of distribution outlets
Advertising and Build awareness and interest in the
Sales Promotion mass market, reduce sales promotion
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 Maturity Stage of the PLC
Summary of Characteristics, Objectives, & Strategies

Sales Peak sales (growth slows, levels off)

Costs Low cost per customer
Profits High profits, then lower profits
Marketing Maximize profit while defending market
Objectives share
Product Diversify brand (many line extensions)
Price Price to match or beat competitors
Distribution Build more intensive distribution
Advertising and Emphasize brand differences,
Sales Promotion encourage brand switching
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 Decline Stage of the PLC
Summary of Characteristics, Objectives, & Strategies

Sales Declining sales

Costs Low cost per customer
Profits Declining profits (or profitable niche)
Marketing Reduce spending; maintain, harvest, or
Objectives drop the product (or reposition/revive)
Product Phase out weak items (back to basics)
Price Cut price
Distribution Selective (phase out weak outlets)
Promotion Reduce to level needed to retain loyal
customers and distribution
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