THE PRODUCT LIFE CYCLE

THE PRODUCT LIFE CYCLE

• DEFINITION
• THE PRODUCT LIFE CYCLE DESCRIBES THE STAGES A PRODUCT WILL PASS THROUGH FROM ITS
INTRODUCTION, THROUGH ITS GROWTH UNTIL IT IS MATURE, AND THEN FINALLY ITS DECLINE.
1. DEVELOPED
2. INTRODUCED
3. GROW
4. MATURITY
5. SATURATION
6. DECLINE
• THE EXACT LENGTH OF THE LIFE CYCLE, IN TERMS OF TIME, VARIES A GREAT DEAL FROM
PRODUCT TO PRODUCT.
THE PRODUCT LIFE CYCLE
 HOW STAGES OF THE PRODUCT LIFE CYCLE
INFLUENCE MARKETING DECISIONS
• BRANDING
• A BRANDED PRODUCT IS LIKELY TO BE SOLD AT A HIGH PRICE WHEN IT IS FIRST
INTRODUCED TO THE MARKET
• PRICES ARE LIKELY TO BE RELATIVELY HIGHER THAN THOSE OF COMPETITORS IN THE
GROWTH STAGE AS THE PRODUCT MAY STILL BE ‘NEWER’ THAN THOSE OF RIVALS.
• IN THE SATURATION OR MATURITY STAGE, WHEN THE BUSINESS WILL WANT TO TRY
TO STOP SALES DECLINING, THE PRICE IS LIKELY TO BE REDUCED
• SOME SUBSTANTIAL PRICE DISCOUNTS MIGHT BE OFFERED DURING THE DECLINE
STAGE – ESPECIALLY IF THE BUSINESS DOES NOT PLAN TO ‘EXTEND ITS LIFE’.
 HOW STAGES OF THE PRODUCT LIFE CYCLE
INFLUENCE MARKETING DECISIONS
• PROMOTION
• SPENDING ON PROMOTION WILL BE HIGHER AT THE INTRODUCTION STAGE THAN IN OTHER
STAGES AS THE BUSINESS HAS TO INFORM CONSUMERS OF THE PRODUCT. ALSO, IF IT IS A
COMPLETELY NEW BRAND, A CLEAR IDENTITY WILL NEED TO BE ESTABLISHED FOR IT.
• ADVERTISING WOULD PROBABLY BE REDUCED IN LATER STAGES - BECAUSE THE PRODUCT
IS ALREADY WELL KNOWN OR BECAUSE THE BUSINESS WANTS TO USE ITS MARKETING
BUDGET ON OTHER, NEWER, PRODUCTS
• PROMOTION SPENDING MIGHT BE INCREASED AGAIN IF THE BUSINESS DECIDES TO ADOPT
AN EXTENSION STRATEGY
 EXTENDING THE PRODUCT LIFE CYCLE

• DEFINITION – EXTENSION STRATEGY IS A WAY OF KEEPING A PRODUCT AT THE

MATURITY STAGE OF THE LIFE CYCLE AND EXTENDING THE CYCLE.
• WHEN A PRODUCT REACHES THE MATURITY OR SATURATION STAGE OF ITS
PRODUCT LIFE CYCLE, A BUSINESS MAY STOP SALES STARTING TO FALL BY
ADOPTING EXTENSION STRATEGIES. THESE ARE WAYS THAT SALES MAY BE
GIVEN A BOOST.
EXTENDING THE PRODUCT LIFE CYCLE
THE EFFECT OF EXTENSION STRATEGIES
 PRODUCT LIFE CYCLE

• IF THE EXTENSION STRATEGIES ARE EFFECTIVE, THE MATURITY PHASE OF THE

PRODUCT LIFE CYCLE WILL BE PROLONGED.
• BUSINESSES WILL NOT USUALLY MANUFACTURE JUST ONE PRODUCT.
• THEY WILL HAVE A RANGE OF PRODUCTS AT DIFFERENT STAGES OF THE
PRODUCT LIFE CYCLE.
• FOR EXAMPLE, A BUSINESS WILL NEED TO HAVE PRODUCTS COMING UP INTO
THE GROWTH PHASE TO COUNTERACT THOSE THAT ARE IN DECLINE.