Shri

Writer: Prof Dr Madhuri S. Deshpande Presenter: Prof Dr Madhuri S. Deshpande

Estimated time: 10 min Status:
Version: Revised:
Mob. No: 9970629604 Address: School of Commerce & Management Sci.
e-mail ID: msd.srtmu@gmail.com Swami Ramanand Teerth Marathwada University,
Nanded 431606,Maharashtra, INDIA

Hi! I am Prof Dr Madhuri Deshpande, Director and Head of the Department of Management in School of
Commerce and Management Sciences of Swami Ramanand Teerth Marathwada University, Nanded,
your teacher for the course Marketing Management. Today’s video session is about the concept of
Product Life Cycle

Contents of the video comprise of concept of Product Life Cycle (PLC), PLC curve, main highlights of
introduction stage, growth stage, maturity stage, and decline stage, significance of PLC concept .

Regarding the learning objectives of the video session; friends, after viewing this video, you will be able
to know the concept of Product Life Cycle, to be familiar with all the four stages of PLC i.e. introduction,
growth, maturity and decline, to learn the characteristics features of all stages of PLC and to understand
the significance of the PLC concept for marketers

Slide no 1: Product life cycle (PLC): An Introduction

Products like human beings have a certain length of life during which they pass through different stages
of existence i.e. life cycle such as introduction, growth, maturity, and decline on similar lines like
infancy, childhood, youth, old age and death in case of a human life cycle. Products grow (in sales), then
decline, and eventually are replaced.

Not all products follow the same life cycle pattern. For some products, life cycle may be as short as a
month while for others it may last for quite a sufficiently long period of time. Duration of each stage of
PLC is not same. It may vary depending upon different factors such as the product, its newness, its
uniqueness, its features, its functions, the marketing strategy, consumer behavior, competition,
technology, industry dynamics and the like.

Few products may all of a sudden find their way directly into decline before entering growth stage.
Customers do not accept them – so low sales or no sales and they are abandoned. However, majority of
the products are seen to pass through the typical life cycle - they are born i.e. introduced in the market,
followed by creation of market awareness, leading to customer acceptance, increasing sales and entry
into growth stage, then market saturation alongwith peak sales with no further increase i.e.
stagnation and then in absence of corrective action in the form of revision or modification of the
product/introduction of a new product curve, withdrawal of the product from the market is inevitable.
Slide no 2: Product Life Cycle: Meaning

A product passes through certain distinct stages during its life, and this is called Product Life Cycle (PLC),
A product’s life cycle can generally be divided into four distinct stages during the course of its life as
introduction, growth, maturity and decline

PLC begins with its market introduction. With product awareness promotion, sales pick up and over a
period of time, market grows rapidly. Ultimately it reaches maturity phase which comprises of peak
sales after which market declines and finally the product dies.

The phase of growth of sales volume is slow during introduction stage, it picks up during maturity stage.
Thereafter, decline in sales volume indicates reducing consumer interest in the product.

Profits are earned later in introduction stage and profits are maximum in growth and maturity stages.

Slide no 3: PLC Curve

The slide illustrates a typical product life cycle in graphical form. PLC is generally presented as a sales
curve spanning across product’s introduction to exit. The product revenue and profits can be plotted as
a function of the life-cycle stage as shown in the graph.

However, not necessarily every product passes through all these stages. Some products may directly
enter decline phase before entering the growth stage. Majority of the successful products are seen
passing through the typical life cycle.

Slide no 4: Introduction phase

In the market pioneering phase, product is newly introduced in the market after successful completion
of R&D. There may not be a ready market for the product; product awareness has to be created.
Obviously, sales are low in the beginning. Demand has to be created and developed. Customers have to
be prompted for trial purchase. Then, sales begin to grow but rate of growth is slow. Low or negative
profits are seen because of low sales volume, large production costs. There is a need of heavy
advertising and sales promotion for creating product awareness and trial.

High costs

Low sales

Negative or low profits

Few competitors

Marketing objective – to create product awareness and trial

Slide no 5: Growth phase

Growth phase begins after the product is accepted by the market. In this phase, rate of increase of sales
turnover is very rapid. Demand for the product increases and size of the market grows. Profits also
increase consequently. In spite of competition, sales and profits are rising. In this phase, effective
distribution and advertising is crucial. Word of mouth advertising attracts new users.

Average costs

Rising sales

Rising profits

Increase in competitors

Marketing objective – to maximize market share

Slide no 6: Maturity phase

In the market maturity phase, demand tends to reach a saturation point. There is adequate supply from
several competitors. There is a need for product differentiation so as to differentiate the offer from the
competitors. Marketers have to adopt measures to stimulate demand and tackle competition through
additional advertising and promotion costs.

Relatively low prices

Peak sales

Increased marketing costs

Lesser profits

Keener competition

Marketing objective – to maximize profit while defending market share

Slide no 7: Decline phase

After reaching the peak point, product inevitably enters the decline stage and becomes obsolete. The
product may gradually be displaced by some new innovation. Sales begin to fall. Prices are reduced,
sales and profits diminish. Marketers may prepare for gradual phasing out of the product. They are
expected to keep new products ready to fill up the gap created by withdrawal of the existing product.

Low costs

Declining sales

Declining profits

Decline in competitors
Marketing objective – to reduce expenditure and milk the brand

Slide no 8: Significance of PLC concept

The PLC concept is an important and useful concept in marketing. It indicates that a product is born or
introduced in a market, grows, achieves maturity in the market, and then at some point in time it enters
its declining stage in sales which leads to ultimate death.

Each stage in the cycle is characterized by a typical market behavior. It provides an insight into
formulation of appropriate marketing strategies and ensures marketing success.

Dear students, we have discussed the concept of PLC. The term PLC indicates that like humans, products
also follow a typical life cycle pattern – introduction, growth, maturity and decline. A new product is
born i.e. introduced in the market, efforts are made by marketers to create awareness about the
availability of the product, its features, utility, likely satisfaction to be provided to the customers etc with
this awareness promotion drive, prospects know about existence and availability of the product, they
develops interest in the marketing offer. In this manner, trial purchase is made by the interested
prospects and this is how sales pick up slowly with increasing market acceptance of the product. With
satisfactory performance of the product and mouth publicity, more and more customers get attracted
towards the product and rapid increase in sales is observed. That means that now the growth phase of
the product has begun. This goes on and many competitors get attracted and enter the market. Increase
in sale continues, it reaches maximum sales, then market saturation beyond which no further growth is
possible. Thereafter, product sales decrease continuously if not arrested with appropriate marketing
action and the marketers withdraw the product from the market. If appropriate marketing action is
taken at right time, then instead of decline, introduction stage begins with ‘new product curve’.

pl find assignments, glossary, questions for practice and additional resources for study in the
description box of the video.

Assignments

Glossary

Prospect:

Questions for Practice

Additional Resources for Study

Recommended Books

Bose, Biplab S., (2010). Marketing Management. Mumbai, India: Himalaya Publishing House
Grewal, Dhruv, & Levy, Michael, (2017). Marketing. Chennai, India: McGraw Hill Education
Kotler, Philip, (2004). Marketing Management. Delhi, India: Pearson Education
Kumar, Arun, & Meenakshi, N., (2007). Marketing Management. New Delhi, India: Vikas Publishing
House
Ramaswamy, V.S., & Namakumari, S., (2005). Marketing Management. New Delhi, India: Macmillan
India Ltd.