Product Life Cycle

Product Life-Cycle Strategies

Sales and profits over the product’s life from inception to decline
9-2
 Product Life-Cycle Strategies

Introduction stage is when the new product is first launched.

• Takes time
• Slow sales growth
• Little or no profit
• High distribution and promotion expense

9-3
Product Life-Cycle Strategies
Growth stage is when the new product satisfies
the market.

• Sales increase • Product quality increases

• New competitors enter the • New features
market
• New market segments and
• Price stability or decline to distribution channels are
increase volume entered
• Consumer education
• Profits increase

9-4
 Product Life-Cycle Strategies

Maturity stage is a long-lasting stage of a product that has gained consumer

acceptance.
• Slowdown in sales
• Many suppliers
• Substitute products
• Competition
• Increased promotion and R&D to support sales and profits.
Marketers consider modifying strategies at the maturity stage

9-5
 Product Life-Cycle Strategies

• Market modifying is when a company tries to increase consumption of the current

product (New users; Increase usage of existing users; New market segments)
• Product modifying is changing characteristics (quality, features, or style) to attract new
users and to inspire more usage.
• Marketing mix modifying is when a company changes one or more of the marketing
mix elements.
• Price
• Promotion
• Distribution channels
9-6
 Product Life-Cycle Strategies

• Decline stage is when sales decline or level off for an extended time,
creating a weak product.
• Maintain the product without change in the hope that competitors leave the industry
• Reposition or reformulate the product in hopes of moving back into the growth stage
• Harvest the product that means reducing various costs and hoping that sales hold up
• Drop the product by selling it to another firm or simply liquidate it at salvage value

9-7
 Additional Product and Service
Considerations

Product Decisions and Social Responsibility

• Public policy and regulations regarding developing and
dropping products, patent protection, product quality and
safety, and product warranties.
International Product and Service Marketing
• Determining what products and services to introduce in which
countries
• Standardization versus customization
9-8
• Packaging and labeling
• Customs, values, laws
 Introduction stage
Sales
Sales Low
Low sales
sales
Costs
Costs High
High cost
cost per
per customer
customer
Profits
Profits Negative
Negative
Create
Create product
product awareness
awareness
Marketing
Marketing Objectives
Objectives and
and trial
trial
Product
Product Offer
Offer aa basic
basic product
product
Price
Price Use
Use cost-plus(skimming/penetration)
cost-plus(skimming/penetration)
Distribution
Distribution Build
Build selective
selective distribution
distribution
Advertising Build
Build product
product awareness
awareness among
among
Advertising early
early adopters
adopters and
and dealers
dealers
 Growth stage
Sales
Sales Rapidly
Rapidly rising
rising sales
sales
Costs
Costs Average
Average cost
cost per
per customer
customer
Profits
Profits Rising
Rising profits
profits
Marketing
Maximize
Maximize market
market share,
share, enter
enter new
new
Marketing Objectives
Objectives
market
market segments
segments
Product
Product Offer
Offerproduct
productextensions,
extensions, service,
service, warranty,
warranty,
improved
improvedproduct
product quality
qualityand
andnew
newfeatures
features
Price
Price
Price
Price to
to penetrate
penetrate market
market
Distribution
Distribution Build
Build intensive
intensive distribution
distribution
Advertising
Advertising Build
Build awareness
awareness and
and interest
interest in
in the
the
mass
mass market
market
 Maturity
Maturity Stage
Stage of
of the
the PLC
PLC

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

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

Product life-cycle (PLC) can also be applied to styles, fashions and fads
• Style is a basic and distinctive mode of expression.
• Fashion is a currently accepted popular style in a given field.
• Fads are temporary periods of unusually high sales driven by consumer enthusiasm and
immediate product or brand popularity.

9-13
Product Life-Cycle Strategies

9-14
The ‘stretched’ PLC
 PLC- Criticisms
• Shape of Curve – Some product forms do not follow the traditional PLC
curve. E.g. in case of fad
• Length of Stages – The PLC offers little help in determining how long each
stage will last. For example, some products can exist in the Maturity stage for
decades while others may be there for only a few months. 
• Patterns May Not Apply to All Global Markets- PLC may not follow the
same patterns when they enter global markets. 
• Impact of External Forces is not considered
• Stages Not Seamlessly Connected – Some high-tech marketers question
whether one stage of the PLC naturally will follow another stage.
 PLC- Group Activity
• Mention at which stage of PLC are the following products (w.r.t Indian market):
1. Traditional bulbs
2. Air Purifier
3. Electric cars
4. Organic food
5. Landline phones
6. Television

• Discuss how the marketing of the product might vary at different stages in its life cycle.
• Discuss in detail the marketing strategies to be adopted at the current stage of the given
products.
Shell’s Directional Policy Matrix