Product Life Cycle

Sri Venkataramana Swamy

College Bantwal
III.B.com A-Batch
Contents:
• Product Life Cycle (PLC)
• PLC Stages
o Introduction
o Growth
o Maturity
o Saturation
o Decline
Product Life Cycle
Every product has its life. Industrial goods
may have a longer life than consumer goods.
Products, like human beings, have length of
life, known as Product Life Cycle (PLC).
In the words of Philip Kotler, “ The Product life
cycle is an attempt to recognise distinct stages
in the sales history of the product”.
 Introduction Stage
In the introduction stage, initial sales growth is slow, but
marketing & promotional expenses are high, leading to negative or
no profit. The Company tries to create product awareness and
induces trial for the product.
 Growth Stage

In the growth stage, sales starts picking up, leading to rising

profits. The company tries to maximize market share,
resulting in increase in profits.
 Maturity & Saturation Stage

Sales reach to its peak in this stage and then it starts declining.
Profit also starts declining. At the end of the stage, the company
struggles to keep its market share intact.
 Declining Stage

In the decline stage, sales as well as profit goes down.

 Strategies
Introduction Growth Maturity Decline

Offer a basic Offer product Diversify brands Phase out weak

Product product extensions, and item product
service, models
warranty
Charge cost plus Price to Price to match Cut price
Price penetrate competition
market
Build selective Build intensive Build more Phase out
Distribution distribution distribution intensive unprofitable
distribution outlets
Build product Build awareness Stress brand Reduce to retain
Advertising awareness among & interest in the differences and hardcore loyals
early adopters & mass market benefits
dealers
Use heavy sales Reduce to take Increase to Reduce to
Sales promotion advantage encourage minimal level
Promotion brand switching
 Factors affecting the Life Cycle of a
Product
• Rate of technical change
• Rate of market / customer acceptance
• Ease of competitive entry
• Risk bearing capacity of the enterprise
• Economic & managerial forces of the
enterprise
• Protection by patents
• Goodwill or image of the enterprise
Thank you