PRODUCT LIFE CYCLE

GROUP MEBERS IBRAHIM KAMRAN

PRODUCT LIFE CYLE

The course of a products sales and profits over its lifetime is called the Product Life Cycle. The product life cycle is based upon the biological life cycle The PLC concept can be applied to what are known as styles, fashions, and fads. The PLC concept can described a product class, a product form, or a brand. The PLC concept applies differently in each case. Not all the product follows the product life cycle.

STAGES OF PLC

Introduction stage Growth stage Maturity stage Decline stage

Sales growth tends to be slow at this stage Cost per customer is high Negative profits Competitors are few The marketing objective is to create product awareness

Stages Of Product Life Cycle
• • • •

Introduction stage Growth stage Maturity stage Decline stage

Marketing strategies (Introduction stage)

Product - one or few products, relatively undifferentiated Price – use cost plus basis to set a price Distribution - Distribution is selective and scattered as the firm commences implementation of the distribution plan. Promotion - Promotion is aimed at building brand awareness. Samples or trial incentives may be directed toward the customers. The introductory promotion also is intended to convince potential resellers to carry the product. Adertising –Advertising is aimed to be high to build product awareness

Examples

Pepsi Tropicana Persona Postpaid (Telenor) Clear Shampoo

Rapidly rising sales Unit manufacturing cost declines Rising profits The marketing objective is to maximize market share

Stage of product life cycle
• • • •

Introduction stage Growth stage Maturity stage Decline stage

Marketing strategies (Growth stage)

Product - New product features and packaging options; improvement of product quality. Price – Price to penetrate the market Distribution - Distribution becomes more intensive. Promotion- Reduce to take advantage of heavy consumer demand. Advertising- Build brand awareness in the mass market

Examples

Warid Mountain dew Lays

Sales are at peak Cost per customer low Profits are high The marketing objective is to maintain or extend the market share.

Stage of product life cycle
• • • •

Introduction stage Growth stage Maturity stage Decline stage

Marketing strategies (maturity stage)

Product –Either modifying the product or diversify the brand. Price - Possible price reductions in response to competition while avoiding a price war. Distribution –Build more intensive distribution. Promotion - Incentives to get competitors' customers to switch.

Examples

Head & shoulder Mobilink Lux Pepsi

Sales started declining Cost per customer still at low Profits are at decline The marketing objective is to reduce the expenditure

Stage of product life cycle
• • • •

Introduction stage Growth stage Maturity stage Decline stage

Marketing strategies (Decline stage)

Product - The number of products in the product line may be reduced. Price - Prices may be lowered to liquidate inventory of discontinued products. Distribution - Distribution becomes more selective. Channels that no longer are profitable are phased out. Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued products.

Examples

Paktel Gsm Pepsi Twist Igloo Ice Cream Yummy Ice Cream

Conclusion

The PLC concept can be applied by marketers as a useful framework for describing how products and markets work. But using the PLC concept for forecasting product performance or for developing marketing strategies presents some practical problems.. In practice, it is difficult to forecast the sales level at each PLC stage, the length of each stage, and the shape of the PLC curve.