Product Life Cycle

Claims of Product Life Cycles

 Products have a limited life

 Product sales pass through distinct stages each with
different challenges and opportunities
 Profits rise and fall at different stages
 Products require different strategies in each life cycle
stage
 Product Life Cycle

Introductory Growth Maturity Decline

Stage Stage Stage Stage

Sales

Profits
Rs.

Time
 Introductory Stage

Full-Scale Launch
of New Products
 High failure rates
 Little competition
 Frequent product modification
 Limited distribution
 High marketing and production
costs
 Negative profits
 Promotion focuses on
awareness and information
 Intensive personal selling to
channels
 Growth stage

 Increasing rate of sales Offered in more

sizes,
 Entrance of competitors flavors, options

 Market consolidation
 Initial healthy profits
 Promotion emphasizes brand ads
 Goal is wider distribution
 Prices normally fall
 Development costs are recovered
 Maturity Stage

 Declining sales growth Many consumer

products are in
 Saturated markets Maturity Stage

 Extending product line

 Stylistic product changes
 Heavy promotions to dealers and
consumers
 Marginal competitors drop out
 Prices and profits fall
 Niche marketers emerge
 Decline Stage

 Long-run drop in sales

 Large inventories of
unsold items
 Elimination of all nonessential
marketing expenses
Rate of decline depends on
change in tastes or
adoption of substitute products