the ppt contains detailed stages of product life cycle with their specific strategy requirements and examples in Indian context, limitations, uses and significance along with special cases of PLC

2.  It is the life of a product in the market with respect to
business/commercial costs and sales measures.
 To say that a product has a life cycle is to assert four things:
 Product has a limited life.
 Product sales pass through distinct stages, each posing different
challenges, opportunities, and problems to the seller.
 Profits rise and fall at different stages of the product life cycle.
 Products require different marketing, financial, manufacturing, purchasing
and human resource strategies in each life-cycle stage.
 Four main stages:

3. Break even
Losses

7.  Slow sales growth; offering of basic product
 Limited distribution
 Negative or low profits
 Little or no competition
 Customers have to be prompted to try the product (awareness creation)
 Intensive personal selling to channel members.
 Promotional expenditures are at their highest ratio to sales.
 Prices tend to be high because costs are high.
 Firms focus on those buyers who are most ready to buy.
 Speeding up innovation time is essential in an age of shortening PLCs.
 To be first can be rewarding, but risky and expensive.
 Concept of pioneer’s advantage.
 First movers also have to watch out for ‘second mover advantage’.

8. • High price
RAPID SKIMMING • High promotion
• Large market unaware of product
• High price and low promotion
SLOW SKIMMING • Market aware of product
• Competition non intense
• Low price intense competition
RAPID PENETRATION • High promotion price sensitivity
• Large market unaware customer
• Low price
SLOW PENETRATION • Low promotion
• Large market, aware customers, price sensitive

10.  Rapid climb in sales; brand building
 Purchase by early adopters
 Increase in public awareness; intensive distribution
 Bringing product extensions, warranty and service
 New competitors enter, attracted by the opportunities
 Prices fall slightly or remain as it is, depending on demand increase and
increased competition.
 Promotional expenditure maintained the same or at slightly increased
level to meet competition and to educate the market.
 Decline in the promotion-sales ratio
 Increase in profits because of economies of scale and learning effect
 Possibility of a trade-off between high market share and high current
profit.

11. Focus shifts towards brand building
Bringing product extensions, warranty & services
Adding new features and improving quality/style/look
Entering new market segments
Increasing distribution coverage
Price reduction to attract new buyers
Increased advertising
Example- Hyundai- i10 car

12. Maggi noodles Washing powders
Axe deodorants

13.  Sales volume peaks and market saturation is reached at some point
 Costs reduced but prices also tend to drop because of competition
 This stage normally lasts longer than the previous stages and poses big
challenges to marketing management as profits go down.
 Majority buyers make repeat purchases, laggards join them
 Can be divided into three phases: growth, stable & decaying maturity
 Growth phase- sales growth rates start to decline, no new distribution
channels to fill, new competitive forces emerge.
 Stable phase- sales flatten on a per capita basis because of market
saturation, future sales governed by population growth & replacement
demand.
 Decaying phase- the absolute level of sales start to decline, customers
begin switching to other products, intensified competition.

14. • Quality improvements (durability, reliability, etc.)
• Feature improvements (utility, safety, convenience, versatility, etc.)
Product • Style improvements (aesthetic value)
modification
• Converting non-users and winning competitor’s customers
• Entering new market segments
Market • Encouraging usage rate (more frequent use, more usage per time)
modification
• Changes in price and distribution of product
Marketing • Changes in sales promotion and personal selling
mix • Changes in services (delivery, maintenance, technology assistance)
modification

15. Nokia Symbian OS CRT monitors
2G moblie technology CD Players

16.  Decline in sales because of technological changes, shift in consumer
tastes, and increased competition
 Laggards and repeat purchases driven sales
 Costs become counter-optimal
 Overcapacity, increased price cutting, reduced promotion & profit erosion
 Most of the product class usually die at this stage
 Withdrawal from market or reduction in number of products offered
 It is also possible to extend the life of the product by various means

17.  Appropriate strategy depends upon the exit barrier, industry’s relative
attractiveness, product category, and the company’s competitive strength
 Different strategies used:
HARVESTING DIVESTING LIQUIDATING
• Gradually • Selling the • Bringing the
reducing a product to product to an
product or another firm if end &
business it has strong dropping off
costs while distribution & the assets
trying to residual
maintain sales goodwill

19. Polo t-shirt Armani cap t-shirt Being Human t-shirt

20.  STYLE: a basic & distinctive mode of expression appearing in a field of
human endeavor (homes, clothing, and art). A style can last for
generations and go in & out of vogue.
 FASHION: a currently accepted or popular style in a given field. Fashions
pass through 4 stages- distinctiveness, emulation, mass fashion, and
decline. The length of a fashion cycle is hard to predict.
 FAD: a fashion that comes quickly into public view, is adopted with great
zeal, peaks early, and declines very fast.
 The acceptance cycle is short
 Fads tend to attract only a limited following who are in search of
excitement and distinctiveness
 Fail to survive because they don’t normally satisfy a strong need

21.  Most product life cycle curves are portrayed as bell shaped. However,
three common alternate patterns are also noted many-a-times:

22.  Most product life cycle curves are portrayed as bell shaped. However, three
common alternate patterns are also noted many-a-times:
 Growth-slump-maturity pattern: sales grow rapidly just after introduction and
then fall to a petrified level that is sustained by late adopters buying the product
for the first time and early adopters replacing it. Often characteristics of small
kitchen appliances.
 Cycle-recycle pattern: often describes the sales of new drugs. Aggressive
promotion of new drugs produces the first cycle. Later, sales start declining and
another promotion push produces a second cycle (usually of smaller magnitude
and duration).
 Scalloped pattern: sales pass through a succession of life cycles based on the
discovery of new-product characteristics, uses, or users. Eg.- sales of nylon: In
thread, in parachute, etc.

23.  When a product reaches the
maturity stage, following
strategies can be adopted to
extend the life of the product:
 Price reductions
 Repackaging and redesigning (to
make them seem new and attract
new attention)
 Launch in new markets
 Revised promotion (to gain new
audience and remind the current
ones)
 Direct selling
 Adding value (new features to the
current product)

24. There are three levels of PLC:
 Product level (eg. Dell XPS 15 laptop)
 Category level (eg. Desktop, laptop, netbook, tablet PC)
 Brand level (HP, Lenovo, Dell, Acer, Apple, Sony)
 Determines the revenue earned
 Helps the firm in being proactive
 Contributes to strategic marketing planning
 May help the firm to identify when a product needs support, redesign,
revitalization, withdrawal, etc.
 May help in new product development planning or creating a marketing
mix for success of a brand/product.

25.  Product planning
 Maintaining a proper balance of product at different stages of PLC
 Preventing cannibalization
 Pre-planning product launch
 Making investment decisions on products
 Choosing appropriate entry and exit strategy
 Prolonging the profitable phase (by highlighting new uses, adding new
users, etc.)
 Shortening the product development time
 Customer management

26.  PLC patterns are too variable in shape and duration to be generalized
 Marketers can seldom tell which stage their product is in.
 For specific products, the duration of each PLC stage is unpredictable.
 A product may appear to be mature when actually it has reached a
plateau prior to another upsurge.
 The PLC pattern is the self-fulfilling result of marketing strategies and that
skillful marketing can in fact lead to continued growth.
 Use of PLC may lead to inappropriate actions sometimes.
 Because of these limitations, strict adherence to PLC can lead a
company to misleading objectives and strategy prescriptions.