Product Life Cycle (PLC):The Product Life Cycle

(PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).

Each product may have a different life cycle  PLC determines revenue earned  Contributes to strategic marketing planning  May help the firm to identify when a product needs support, redesign, reinvigorating, withdrawal, etc.  May help in new product development planning  May help in forecasting and managing cash flow

product life cycle Sales and Profits ($) Sales Profits Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline .

Introduction Stage of the PLC Sales Costs Profits Marketing Objectives Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Build selective distribution Build product awareness among early adopters and dealers Product Price Distribution Advertising .

service.Growth Stage of the PLC Sales Costs Profits Marketing Objectives Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions. warranty Price to penetrate market Build intensive distribution Build awareness and interest in the mass market Product Price Distribution Advertising .

Maturity Stage of the PLC Sales Costs Profits Marketing Objectives Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits Product Price Distribution Advertising .

Decline Stage of the PLC Sales Costs Profits Marketing Objectives Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Product Price Distribution Advertising Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers .

  Stage 2: Market Growth Customers like the flavor and begin to make routine purchases.  Coke introduces their competing flavor.  .  Pepsi also spends a lot of money advertising the new flavor creating awareness.Example: New Flavor of Pepsi  Stage 1: Market Introduction Pepsi bottles the new flavored product and places it on the market for consumers.

 Some loyal fans stay behind. Stage 3: Market Maturity  More competitors enter the market taking some of Pepsi’s profits.  Stage 4: Sales Decline Customers have moved on to the next new flavor.  .