PRODUCT LIFE CYCLE

PRODUCT LIFE CYCLE

Product Life Cycle describes the period of time over which an item is developed, brought to market and
eventually removed from the market. This curve is typically divided into FOUR stages:
- Introduction
- Growth
- Maturity Sales
- Decline
A conceptual representation of the product ageing process.
But not all products follow all stages of Product Life Cycle.
Some continue to grow and others rise and fall.
Product life cycles enable a comprehensive understanding of
where the products and brands currently stand in a company's portfolio. Time

This sequence of stages is associated with changes in the marketing situation, thus impacting the marketing
strategy and the marketing mix.
 Advantages and Disadvantages of
Product life cycle
ADVANTAGES
FORMULATING STRATEGIES
It can help in defining strategies that can be used based on the life cycle stage. For example, if a product is in growth
stage, then naturally a lot of advertising and investments are needed to keep the product in the growth stage.
PLANNED OBSOLENCE
However, the product life cycle is the perfect measure of when to say goodbye to a product and it can help marketing
managers with the decision to eliminate a product from their portfolio.

DISADVANTAGES
Creates a false sense of security about the predictability of future sales.
Presents a product oriented rather than a market oriented picture
 Other Patterns of PLC Curve
• Growth-Slump-Maturity Pattern
• Cycle-Recycle Pattern
• Scalloped Pattern

Three Special Categories

• Style
• Fashion
• Fad
 Growth Slump Maturity Pattern

Rapid Sales Growth Sudden Fall in Sales Sustained Sales

Growth Slump Maturity Pattern Hand Held Mixer

ycle-Recycle Pattern
Period of growth & Fall in Sales & hence Production of
decline a push Second Cycle

Drugs

Cycle-Recycle Pattern
Scalloped Pattern
Discovery of new Succession of
Growth Periods
uses, users Growth Periods

Hosiery Shirts

Carpeting

Scalloped Pattern
Nylon
Style Life Cycle
STYLE - A basic and distinctive mode of expression appearing in a field of
human endeavour.

Style

Homes Clothing Art

Style Life Cycle

 FASHION LIFE CYCLE
A fashion is a currently accepted or popular style in a given field

Stages
1. Distinctiveness

2. Emulation
Fashion Life Cycle

3. Mass Fashion

4. Decline
INTRODUCTION STAGE
aracteristics :
New product is launched
Usually Low Sales
High cost per customer
Profits are negative
Customer Type : Innovators / Early Adopters
Competitors : Few
Marketing Strategies
•Objective : Create Awareness & Trial

•Offer Basic Product

•Skimming or Penetrative Pricing Strategy

•Limited Focused Distribution

•Advertising : Build awareness among early adopters &

Dealers / Resellers
neering Advantages
First mover’s Advantage

Establishes the attributes that the product class

should possess

TOP of Mind Recall

Pioneering Disadvantages
•A lack of resources to compete against
Larger Firms

•Successful Imitators thrived by offering

lower prices

•Managerial Incompetence & Unhealthy

complacency

•Product development costs that exhausted

the innovator’s resources
GROWTH STAGE
 Concept
Second stage of Product life cycle
For many manufacturers, it’s a key stage for establishing position in market
Sales are accelerated, or sales lift-off that is known as Take-off point.
Product gains market acceptance
Entry of new competitors
Overall profits and profit margins increase.
Cash flow turns positive.
Marketing strategies
Since competitors try to enter the market at this stage, following ways can be adopted:
1) PRODUCT
Improving product quality and product features
Introducing new variants of the product.
2) DISTRIBUTION
Change or expand the distribution channels.
3) PRICE
Lower prices which can be a competitive advantage.
4) PROMOTION
Emphasis on Differentiation and Incentives to customers.
Maggi and Top Ramen
When Maggi hit the Indian markets, in 1983, Everyone was thrilled by the 2- minute
idea of cooking a meal.
They launched it making an emotional connect with middle-class working mothers.
In 1985,demand of maggi had tremendously increased.
In 1990, Top Ramen came as a big competition to maggi, sales were hit.

Then they tried changing their product type, to hold on to the market, and brought in Maggi
Macaroni in 3 different tastes.
But it failed to impress the consumers, because it did not have a good taste.
In 1999, Maggi bounced back in the market with the original maggi taste, and was well accepted
by the consumers.
In 2006-2011,its growth was 1480%,in range of Rs.9000-22000.
It showcased its features of colour display, games ,Dual Sim.
It used promotional strategies like:
1) Free Pre-paid connections
2) High profit margins for Dealers
3) Kitchenware Gifts

Aamir khan Samsung.mp4

During 1930s-1940s, the sales sky rocketed because of value- for money competitive
pricing.
Prices were kept lower than competitor Coca-Cola.
5 cents-12 ounces of Pepsi
5 cents-6 ounces of Coca-Cola
It started coming in bottles, and became a consumer good.
Greater advertising was done to capture the market share of Coca-Cola.
Two Advertising techniques were:
Radio in 1930
Pepsi Radio Ad.mp3
1975 Pepsi challenge marketing campaign, wherein Sweet taste of pepsi was chosen over Coca-
Cola in a blind experiment.
MATURITY STAGE
 Characteristics
Stage divides into three phases:
◦ Growth: Slows down
◦ Stable: Sales per capita flatten
◦ Decaying maturity: Absolute level of sales starts to decline

Market Saturation
Sales Volumes Peak
Maturity
Decreasing Market Share
Profits Start to Decrease
 Laptops

Tablet PCs
Typewriter

Holographic
Projection
 Strategies
Market modification
◦ Expand your customer base
◦ Volume = number of brand users × usage rate per user
Product modification
◦ Quality improvement: increases functional performance by launching a “new and
improved” product
◦ Feature improvement: adds size, weight, materials, supplements, and accessories that
expand the product’s performance, versatility, safety, or convenience.
◦ Style improvement: increases the product’s esthetic appeal.
Marketing program modification
◦ modifying nonproduct elements
◦ price, distribution, and communications in particular.
Strategies in practice
STRATEGIES IN PRACTICE
DECLINE STAGE
 DECLINE STAGE DETAILS
• DE C L I N E IN SAL E S DU E TO T E C H N O LO G I C A L C H A N G E S ,
S H I F T S I N CO N S UM ER TAST E S , A N D I N C R EAS E D
CO M P E T IT ION
• L AG GA R DS AN D R EP EAT P U RC H AS E DR IV E N SA L E S
• OV E RC A PAC IT Y, IN C R EAS E D P R I C E C U T T I N G , R E DU C E D
P RO M OT IO N AN D P RO F I T E RO S I O N.
• M O ST O F T H E P RO DU C T C L AS S U S UA L LY DI E AT T H IS STAG E .
• W I T H DR AWAL F RO M M A R K E T O R R E DU C T IO N I N T H E
N U M BE R OF P RO DU CT S O F F E R E D.
• I T I S A LS O P O S S IB L E TO E XT E N D T H E L IF E O F T H E
P RO DU C T BY A N Y M EA N S .
 STRATEGIES IN DECLINE STAGE
Appropriate strategy depends upon the exit barrier, industry’s relative attractiveness,
product category, and the company’s competitive strength.
Different strategies used:

MAINTAIN

HARVEST

WITHDRAW
HARVEST WITHDRAWAL
 Maintenance and Extending the
Product Life Cycle
Extension strategies extend the life of the product before it goes
into decline. Again businesses use marketing techniques to
improve sales. Examples of the techniques are:
1.Advertising
2.Price reduction
3.Adding value
4.Explore new markets
5.New packaging
Maruti-800 Product Life Cycle

CASE STUDY
Maruti-800 Product Life Cycle
A small city car manufactured by Maruti Suzuki in India from 1983 to 2014
Over three decades of market presence most of it as the top selling car in the
country
In the 1980s and 1990s, the name ‘Maruti’ was synonymous with Maruti 800
Remained the best selling car in India till 2004
MARUTI-800 Introduction stage (1983-
86)
Launched in December 1983, Maruti 800
Racy and fast with sharp angular lines compared to
round and flabby Ambassadors
Symbolic of Indian pride post 1983 World Cup win
Cheapest car in market, waiting time of over 3 years,
huge demand supply gap
Targeted the urban consumer who desired a car
MARuti-800 Growth Stage (1987-1996)
Steep surge in demand
First export in 1987
No threat of competitors
STRATEGIES ADOPTED
New features launched like AC version, music system
Customer Care paramount: Maruti Service Stations every
25kms on a highway
New car models launched
Maruti-800 maturity stage (1997-2002)
PRODUCT MODIFICATION
Softened sharp angular lines with a jelly bean design.
Product differentiation: Revamped version of Maruti
800 EX with new engine, shock absorber, coil spring
suspension launched. But this model lost sales
gradually
COMPETITION
Competitors like General Motors, Ford and Tata
STRATEGY
Developed new revenue streams – Maruti Insurance,
Maruti Finance
MARUTI-800 Decline stage (2003-
2014)
Heavy competition from i10, Spark etc
Drastic decline in sales
Withdrawn from 13 cities including metros
Sales continue in rural and semi-urban areas.
Repositioned to Alto 800
Tata Motors launched Nano that was smaller and more
spacious than Maruti-800