NATIONAL UNIVERSITY OF SCIENCES AND

TECHNOLOGY

MILITARY COLLEGE OF SIGNALS

ENGINEERING PROJECT MANAGEMENT

ASSIGNMENT 2

Product Life Cycle

SUBMITTED BY:

WAJIHA JAWWAD

BETE 54D
 Product Life Cycle

Definition
The term product life cycle refers to the length of time a product is introduced to consumers into the
market until it is removed from the shelves. Products have life cycles. A product begins with an idea,
then it undergoes research and development (R&D) and is found to be feasible and potentially
profitable. At that point, the product is produced, marketed, and rolled out.

Stages
The life cycle of a product is broken into four stages:
• Introduction
• Growth
• Maturity
• Decline

1. Introduction
This stage is characterized by a low growth rate of sales as the product is newly launched and
consumers may not know much about it. There may be less competition. product can prove to be very
effective and in great demand.

Characteristics
• High costs due to initial marketing, advertising, distribution
• Sales volumes are low, increasing slowly
• There may be little to no competition
• Demand must be created through promotion and awareness campaigns
• Customers must be prompted to try the product.
• Little or no profit is made owing to high costs and low sales volumes

2. Growth
During the growth stage, the public becomes more aware of the product; as sales and revenues start to
increase, profits begin to come. The growth stage is the period during which the product eventually
and increasingly gains acceptance among consumers, the industry, and the wider general public.

Characteristics
• Cost per unit reduced as production and distributions are ramped up
• Sales volume increases significantly due to product popularity
• Profitability begins to rise, revenues begin to exceed costs
• Public awareness increases through increased promotion
• Competition begins to increase with a few new players in establishing market

3. Maturity
During the maturity stage, sales will peak as the product reaches market saturation, and During this
stage, sales growth has started to slow down, and the product has already reached widespread
acceptance in the market. Demand for the product ultimately decreases due to competition and market
saturation

Characteristics
• Improving specific features in order to resell the product
 • Lowering prices in order to fight off competition.
• Intensifying distribution and promotional efforts.
• Sales volume peaks and market saturation is reached
• Increase in numbers of competitors entering the market
• Brand differentiation and feature diversification is emphasized
• Industrial profits go down, competition will grow increasingly fierce.

4. Decline
During decline, sales growth becomes negative, profits decline, competition remains high, and the
product ultimately reaches its ‘death’.

Characteristics
• A decline in sales volume as competition becomes severe, and popularity of the product falls
• A fall in prices and profitability
• Profit increasingly becomes a challenge of production/distribution efficiency rather than
increased sales.

Typical Graphical Representation

Examples
1. Introduction
Self-driving cars, Electric Cars, Hologram Technology, Virtual Reality, Wireless Charging
Products are relatively new and are thriving to make their space in the market
2. Growth
Air Pods, Tablet PC’s, Automatic Washing Machines, Dishwashers, Smart Watches are
growing stage products
3. Maturity
Smartphones, Laptops, LCDs are popular product examples for the Maturity stage.
4. Decline
Floppy disks and drives, CDs, push button phones, Diesel cars ,Square box TVs, VCRs,
Typewriters, dial up Modems, Cassettes are all examples of products in their decline stage.
Implications
Conducting PLC analysis can help companies determine if their products are servicing the market they
target efficiently, and when they might need to shift focus. Examining their product's life cycle,
specifically paying attention to where their products are in the cycle, can help companies determine if
they need to develop new products to continue generating sales.

1. The PLC can be a predictive device, forecasting how products may behave in the future, can help
us to understand how products relate to markets.
2. The PLC can be a comparative device, warning of any significant deviations from the market norm
or enabling a strategic balance to be achieved among products within the same range.
3. The PLC can be a formative device, assisting the design of future product/ market strategies based
on sales performance in combination with experience and additional analysis.
4. The PLC can be a manipulative device, indicating when short-term strategies might be used to
‘distort’ the life cycle to our advantage.

Criticism
As we have seen, the PLC has the ability to offer marketers guidance on strategies and tactics as they
manage products through changing market conditions. Unfortunately, the PLC does not offer a perfect
model of markets as it contains drawbacks that prevent it from being applicable to all products.

• SHAPE OF CURVE
All products do not follow the traditional PLC curve strictly. For example, textile can go
through up and down cycles because of fashion trends.

• LENGTH OF STAGES
The PLC graph does not help in determining how long each stage will last for a product. For
example, some products can exist in the Maturity stage for decades while others may be there
for only a few months.

• COMPETITOR REACTION IS NOT PREDICTABLE

PLC suggests that competitor response occurs in a consistent pattern. PLC says competitors
will not engage in strong competition until a product has gained a foothold on the market.
Competitors do not always follow theoretical models. Some will always compete on brand first
and leave it to others to build market interest for the product form.

• PATTERNS MAY NOT APPLY TO ALL GLOBAL MARKETS

PLC does not follow the same patterns when products may enter other global markets because
customer behaviour is quite different globally. For instance, a company may sell good in-home
market but find it hard to sell in foreign market.

• USE FOR FORECASTING

The impact of external forces may create challenges in using the PLC as a forecasting tool.
Economic factors may impact a product for a time period and push it to the next stage, but
afterwards the product may recover once the economic condition restores. So, PLC cannot be
used as an ultimate tool on the fortune of the product.