Product Life Cycle Notes

Product Life Cycle (PLC)

• Definition: The cycle a product goes through from introduction to withdrawal.
• Stages: Product development, introduction, growth, maturity, and decline.

Objectives

• Describe PLC stages and marketing strategy changes.
• Discuss socially responsible product decisions and international marketing.

Product Life Cycle Stages

• Product Development: Idea development, high investment, zero sales, negative profits.
• Introduction: Low sales, high cost per customer, negative profits, target innovators.
  • Marketing: Basic product, cost-plus pricing, selective distribution, build awareness, heavy sales promotion.
• Growth: Rapidly rising sales, average cost per customer, rising profits, target early adopters.
  • Marketing: Product extensions, penetration pricing, build intensive distribution, mass market advertising, reduced sales promotion.
• Maturity: Sales peak, low cost per customer, high profits, target middle majority.
  • Marketing: Diversify brand/models, competitive pricing, intensive distribution, stress brand differences, increased sales promotion.
• Decline: Declining sales and profits, low cost per customer, target laggards.
  • Marketing: Phase out weak items, cut price, selective distribution, reduce advertising and sales promotion.

PLC Dimensions

• Product Brand: Specific product version by a company.
• Product Class: Entire product category (e.g., video games).
• Product Form: Variations within a product class.

Additional Considerations

• Watch the market lifecycle as well as the product lifecycle.
• Not all products follow the typical cycle; consider fads, styles, and fashions.

Visual Representation

• Stages: Beginning of Life (BOL), Middle of Life (MOL), End of Life (EOL).

Sales and Profits Curve

• Sales increase over time, peak during maturity, then decline.
• Profits rise during growth, peak during maturity, then decline.

Examples

• China as a “virgin” market opening to new products.