Description
A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation.
Product Life Cycle(PLC)
Introduction
• The theory of a product life cycle was first introduced in the 1950s to explain the expected life cycle of a typical product from design to obsolescence.
• Writing in Marketing Tools, Carole Hedden observed that the cycle is represented by a curve that can be divided into four distinct phases: introduction, growth, maturity, and decline.
Continue…
• The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).
Continue..
• In theory it's the same for a product. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn.
Graphical Representation of PLC
Maturity Decline Growth
VOLUME
Introduction
TIME
Product life Cycle - A product goes through various stages in its life starting from an introduction stage to maturity and decline. Different stages generate different revenues and profits depending on the marketing strategies and plans adopted.
The Product Life Cycle
A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the PRODUCT LIFE CYCLE and is associated with changes in the marketing situation, thus impacting the marketing strategy and the MARKETING MIX. The product revenue and profits can be plotted as a function of Life-Cycle stages as shown in the graph below:
Product Life
Maturity
• As the product approaches the end of its growth stage, sales begin to Decline decline. the maturity stage when but most customers • • At After this stage sales are still rising at target a decreasing rate.own the product, the decline stage culminating • product Market enters for thethis product becomes saturated eventually in its disappearance. Growth Few product weather theintense. storm by either forming alliances or by adopting • • Price competition becomes various tacticsto survive • As the product gains ground, sales increase. The product is acceptability finely differentiated and more efforts are put on customer services. • This is the period when sales are rising at an increasing rate. Introduction TIMEdifferentiation being to develop. • Competitors enter the market and brand • Product is first introduced to the market and efforts are being made for the product to gain a foothold in the market. • Sales are likely to be slow and creep along slowly. • Competition is limited. • Profit margins at this stage are very low and in some cases losses occur.
VOLUME
Important aspects of PLS
Some important aspects of product life cycles are (A) Their length (B) The shape of the sales curve (C) How they vary by product ? (D) The rate at which consumers adopt products.
Limitation of PLC concept
• In reality very few products follow such a prescriptive cycle. The length of each stage varies enormously. • The sales of some products rise quickly and may decline at the same rate. However, some products may contunue at the sme stage for along. Ex- Cadbury’s Dairy Milk chocolate.
• Increase in marketing activities like promotion may alter the shape of PLC’s sales curve to a extend.
Practical Problems of PLC
Hard to identify which stage of the PLC the product is in Hard to pinpoint when the product moves to next stage
PLC
Hard to forecast sales level, length of each stage, and shape of PLC
Hard to identify factors that affect product’s movement through stages
Summary of Characteristics, Objectives, & Strategies
? Those products that survive the earlier stages tend to spend longest in this phase.
? Sales grow at a decreasing rate and then stabilise.
? Producers attempt to differentiate products.
? Price wars and intense competition occur. ? At this point the market reaches saturation. ? Producers begin to leave the market due to poor margins. ? Promotion becomes more widespread and use a greater variety of media.
1. Strategies for Introduction stage:-
1. Rapid Skimming
2. Slow Skimming 3. Rapid Penetration
4. Slow Penetration
2. Strategies for Growth stage:Firms use various strategies to cash in on the growth in the market, as quickly as possible.
1.They restore to aggressive pricing, including price cuts to attract price sensitive customers.
2.They emphasize the product’s benefits in order to create a competitive Niche in the market.
3. They try to improve product quality and add new features and models. Other changes brought about to the product include making the product include making the product available in different sizes, flavors, etc 4.They may introduce new distribution channels. 5.They enter new markets.
3. Strategies for Maturity stage:Firms adapt various strategies to stimulate sales in the Maturity stage, like: 1. Abandon weaker products and concentrate more on profitable products.
2. Increase advertising and sales promotion. Marketers resort to introducing fresh advertising campaigning, new packaging and even product relaunches during this stage. Invest more in R&D to bring about improvements in the product and product line extensions.
3.
4. Strategies for Decline stage:To tackle the decline stage, most firms indulge the strategies like..
1. Reducing the money number of products in a product line afford to the market especially those products that are not earning profits. Cutting down the distribution channels and the distributions with poor sales. Ultimately withdrawing totally from the market or withdrawing from the weaker segments and weaker trade channels. Maintain the firms investment level until the market uncertainty passes by. Diver the business through disposal of assets.
2. 3. 4. 5.
$ Balla Institute Of Technology & Management
doc_280574312.ppt
A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation.
Product Life Cycle(PLC)
Introduction
• The theory of a product life cycle was first introduced in the 1950s to explain the expected life cycle of a typical product from design to obsolescence.
• Writing in Marketing Tools, Carole Hedden observed that the cycle is represented by a curve that can be divided into four distinct phases: introduction, growth, maturity, and decline.
Continue…
• The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).
Continue..
• In theory it's the same for a product. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn.
Graphical Representation of PLC
Maturity Decline Growth
VOLUME
Introduction
TIME
Product life Cycle - A product goes through various stages in its life starting from an introduction stage to maturity and decline. Different stages generate different revenues and profits depending on the marketing strategies and plans adopted.
The Product Life Cycle
A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the PRODUCT LIFE CYCLE and is associated with changes in the marketing situation, thus impacting the marketing strategy and the MARKETING MIX. The product revenue and profits can be plotted as a function of Life-Cycle stages as shown in the graph below:
Product Life
Maturity
• As the product approaches the end of its growth stage, sales begin to Decline decline. the maturity stage when but most customers • • At After this stage sales are still rising at target a decreasing rate.own the product, the decline stage culminating • product Market enters for thethis product becomes saturated eventually in its disappearance. Growth Few product weather theintense. storm by either forming alliances or by adopting • • Price competition becomes various tacticsto survive • As the product gains ground, sales increase. The product is acceptability finely differentiated and more efforts are put on customer services. • This is the period when sales are rising at an increasing rate. Introduction TIMEdifferentiation being to develop. • Competitors enter the market and brand • Product is first introduced to the market and efforts are being made for the product to gain a foothold in the market. • Sales are likely to be slow and creep along slowly. • Competition is limited. • Profit margins at this stage are very low and in some cases losses occur.
VOLUME
Important aspects of PLS
Some important aspects of product life cycles are (A) Their length (B) The shape of the sales curve (C) How they vary by product ? (D) The rate at which consumers adopt products.
Limitation of PLC concept
• In reality very few products follow such a prescriptive cycle. The length of each stage varies enormously. • The sales of some products rise quickly and may decline at the same rate. However, some products may contunue at the sme stage for along. Ex- Cadbury’s Dairy Milk chocolate.
• Increase in marketing activities like promotion may alter the shape of PLC’s sales curve to a extend.
Practical Problems of PLC
Hard to identify which stage of the PLC the product is in Hard to pinpoint when the product moves to next stage
PLC
Hard to forecast sales level, length of each stage, and shape of PLC
Hard to identify factors that affect product’s movement through stages
Summary of Characteristics, Objectives, & Strategies
? Those products that survive the earlier stages tend to spend longest in this phase.
? Sales grow at a decreasing rate and then stabilise.
? Producers attempt to differentiate products.
? Price wars and intense competition occur. ? At this point the market reaches saturation. ? Producers begin to leave the market due to poor margins. ? Promotion becomes more widespread and use a greater variety of media.
1. Strategies for Introduction stage:-
1. Rapid Skimming
2. Slow Skimming 3. Rapid Penetration
4. Slow Penetration
2. Strategies for Growth stage:Firms use various strategies to cash in on the growth in the market, as quickly as possible.
1.They restore to aggressive pricing, including price cuts to attract price sensitive customers.
2.They emphasize the product’s benefits in order to create a competitive Niche in the market.
3. They try to improve product quality and add new features and models. Other changes brought about to the product include making the product include making the product available in different sizes, flavors, etc 4.They may introduce new distribution channels. 5.They enter new markets.
3. Strategies for Maturity stage:Firms adapt various strategies to stimulate sales in the Maturity stage, like: 1. Abandon weaker products and concentrate more on profitable products.
2. Increase advertising and sales promotion. Marketers resort to introducing fresh advertising campaigning, new packaging and even product relaunches during this stage. Invest more in R&D to bring about improvements in the product and product line extensions.
3.
4. Strategies for Decline stage:To tackle the decline stage, most firms indulge the strategies like..
1. Reducing the money number of products in a product line afford to the market especially those products that are not earning profits. Cutting down the distribution channels and the distributions with poor sales. Ultimately withdrawing totally from the market or withdrawing from the weaker segments and weaker trade channels. Maintain the firms investment level until the market uncertainty passes by. Diver the business through disposal of assets.
2. 3. 4. 5.
$ Balla Institute Of Technology & Management
doc_280574312.ppt