Lebanese International University

BMKT300 – Marketing Theory and Principles

Spring 2019 - 2020

 CHAPTER 9

Developing New Products and Managing the

Product Life Cycle

Page 278
 Product Life-Cycle Strategies (p.289)
• After launching a new product, management wants that
product to enjoy a long and happy life.
• Although it does not expect the product to sell forever, the
company wants to earn a decent profit to cover all the
effort and risk that went into launching it.
• Management is aware that each product will have a life
cycle, although its exact shape and length is not known in
advance.
 Product Life-Cycle Strategies (p.289)

• The Product Life-Cycle (PLC) is the course of a

product’s sales and profits over its lifetime.
• It has five distinct stages:

1 2 3 4 5
 Product Life-Cycle Strategies (p.289-291)
PLC Stages

1) Product Development: begins when the company finds

and develops a new-product idea. During product
development, sales are zero and the company’s investment
costs mount.
 Product Life-Cycle Strategies
PLC Stages

2) Introduction: is a period of slow sales growth as the

product is introduced in the market. Profits are nonexistent in
this stage because of the heavy expenses of product
introduction.
 Product Life-Cycle Strategies
PLC Stages

3) Growth: is a period of rapid market acceptance and

increasing profits.
 Product Life-Cycle Strategies
PLC Stages
4) Maturity: is a period of slowdown in sales growth because the
product has achieved acceptance by most potential buyers. Profits
level off or decline because of increased marketing outlays to
defend the product against competition.
 Product Life-Cycle Strategies
PLC Stages

5) Decline: is the period when sales fall off and profits drop.
 Product Life-Cycle Strategies (p.291)

The PLC concept can be applied to describe:

1- A product class

2- A product form

3- A brand

The PLC concept applies differently in each case.

 Product Life-Cycle Strategies (p.291)

1) Product Classes: Product classes have the longest life cycles; the
sales of many product classes stay in the mature stage for a long time.

Example 1: Petrol-powered cars

Example 2: Electronic devices

 Product Life-Cycle Strategies

2) Product Forms: Product forms tend to have the standard PLC shape.
Product forms such as dial telephones, VHS tapes, and film cameras
passed through a regular history of introduction, rapid growth, maturity,
and decline.

Example 1: Sports cars

Example 2: Televisions
 Product Life-Cycle Strategies

3) Brands: A specific brand’s life cycle can change quickly because of

changing competitive attacks and responses. For example, although
laundry soaps (product class) have enjoyed a long life cycle, the life
cycles of laundry product forms and specific brands have tended to be
shorter

Example 1: Ferrari

Example 2: Samsung
 Product Life-Cycle Strategies (p.292)

The PLC concept can be also applied to describe to what are known as:

1) Style

2) Fashion

3) FADS
 Product Life-Cycle Strategies (p.292)

1) Style: is a basic and distinctive mode of expression. Once

invented, it may last for generations, passing in and out of
vogue, showing several periods of renewed interest.
 Product Life-Cycle Strategies (p.292)

Style Examples:
 Product Life-Cycle Strategies

2) Fashion: is a currently accepted or popular style in a given field. It

tends to grow slowly, remain popular for a while, and then decline
slowly. For example, the more formal “business attire” look of corporate
dress of the 1980s and 1990s gave way to the “business casual” look of
the 2000s and 2010s. Fashions tend to grow slowly, remain popular for a
while, and then decline slowly.
 Product Life-Cycle Strategies

Fashion Examples:
 Product Life-Cycle Strategies
3) Fad: a Fad is a temporary period of unusually high sales driven by
consumer enthusiasm and immediate product or brand popularity. A
fad may be part of an otherwise normal life cycle, as in the case of
recent surges in the sales of poker chips and accessories. Or the fad
may comprise a brand’s or product’s entire life cycle.
 Example of Fad
An example of Fad is the fidget spinner—the
small, three pronged ball-bearing device that
you flick and spin to relieve stress or just
because it’s fun to do. Dubbed the “hula
hoop of Gen Z,” the spinners took the
preteen and teen market by storm in early
2017. By early May of that year, the gizmos
accounted for an amazing 17 percent of
daily online toy sales. However, like most
fads, sales quickly started to fizzle. By June,
then widely sold by mass merchants like
Walmart and Target, the gadgets were
becoming too common to be cool.
Notoriously fickle teens lost interest and
moved on to the next shiny new thing.
 Product Life-Cycle Strategies

Fad Examples:
 Product Life-Cycle Strategies
Conclusion

• When used carefully, the PLC concept can help in

developing good marketing strategies for the different life-
cycle stages.
• However, it is difficult to forecast the sales level at each
PLC stage, the length of each stage, and the shape of the
PLC curve.

The product’s current PLC position suggests the best

marketing strategies, and the resulting marketing strategies
affect product performance in later stages.
 Product Life-Cycle Strategies
Conclusion

• The moral of the product life cycle is that companies must

continually innovate, otherwise, they risk extinction.
• No matter how successful its current product lineup, a
company must skillfully manage the life cycles of existing
products for future success.
• And to grow, the company must develop a steady stream of
new products that bring new value to customers.