Content
1. What is PLC?
2. Definition of PLC
3. Stages of Product Life Cycle?
4. Features & Importance
5. Factors Affecting PLC
6. PLC Cases & Examples
7. Download PPT
1. What is Product Life Cycle?
All products have a certain length of life during which they pass through certain identifiable stages. The PLC is a conceptual representation of the product ageing process. Like your life is divided into stages same as the life of a product is also divided.
Products start with an introduction in the market for sale. The demand for that product is gradually increased in the market & its reach to its maximum, from where it starts declining. It is an effective lifespan of a product.
2. Definitions of Product Life Cycle
According to Philip Kotler :
“The PLC is an attempt to recognise the distinct stages in the sales history of the product.”
According to William J. Stanton :
“The Product life cycle concept is the explanation of the product from its birth to death as a product exists in different stages and different competitive environments.”
3. Stages of Product Life Cycle
There are four stages of the product life cycle
1. Introduction Stage
2. Growth Stage
3. Maturity Stage
4. Decline Stage
1. Introduction Stage
It is the first stage, wherein the product is launched in the market with full-scale production and marketing programme. The product is a new one. It means “a product that opens up an entirely new market, replaces an existing product or significantly broadens the market for an existing product.”In this stage, sales grow at a very low rate because it is not an effective demand.
Characteristics
1. Low and slow sales
2. High product price
3. Heavy promotional expenses
4. Lack of knowledge
5. Low profits
6. Narrow product lines
2. Growth Stage
Once the market has accepted the product, sales begin to rise and the product enters its 2nd stage.
• The product achieves considerable and widespread approval in the market. The sales and profit increases at an accelerated rate.
• In this effective distribution, advertising and sales promotion are considered as the key factors.
Characteristics
1. Rapid increase in sales
2. Product improvements
3. Increase in competition
4. Increase in profits
5. Reduction in price
6. Strengthening the distribution channel
3. Maturity Stage
Market becomes saturated because the household demand is satisfied and distribution channels are full. The product has to face keen competition which brings pressure on prices. Though the sales of the product rise but at a lower rate. Profit margin however declines due to keen competition.
Characteristics
1. Sales increases at a decreasing rate
2. Normal promotional expenses
3. Uniform and lower prices
4. Product modifications
5. Dealer’s support
6. Profit margin decreases
4. Decline Stage
This is the final stage, sooner or later actual sales begin to fall under the impact of new product competition and changing consumer behaviour. The sales and profits fall sharply and the promotional expenditure has to be cut down drastically.
Characteristics
1. Rapid decrease in sales
2. Further decrease in prices
3. No promotional expenses
4. Suspension of production work
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4. Features & Importance of Product Life Cycle
Features
1. Every product has the life cycle as every human being has.
2. Every product cycle starts from an introduction of the product in the market and it is ceased after passing through the market growth and market stages.
3. It denotes that the product passes from different stages at a different speed in course of completing the whole cycle.
4. The profit of a business firm grows rapidly in the stage of growth and starts declining due to competitive conditions at the stage of maturity.
5. However the sales volume goes on increasing.
6. The duration of each stage is different for different products. It depends upon the factors (nature of products, technological advancements, competition pressure, etc.)
7. Not all products need to go through all stages, some fall at the initial stage, and others may reach at maturity stage after a long time.
8. It provides a useful framework for developing effective marketing strategies in different stages of the product life cycle.
Importance
1. It is helpful in sales forecasting.
2. Helpful as a predictive tool.
3. It is helpful as a planning tool.
4. Helpful as a control tool.
5. Helps in framing marketing programme.
6. Helpful in price determination.
7. Development of new product.
8. Comparison of different products
5. Factors Affecting PLC
1. Rate of technological change.
2. Rate of market acceptance.
3. Competitor’s entry.
4. Economic and managerial forces.
5. Risk bearing capacity.
6. Government policy.
6. Product Life Cycle Cases & Examples
1. PRODUCT LIFE CYCLE FOR STYLISH PRODUCTS
a) A style is a manner in which a product is presented in certain styles come and go.
b) According to Kotler: “A style is a basic and distinctive mode of expression.” E.g. Furniture, clothing, automobile and shoes.
c) The current style of mobile phone is a touch screen and this style will last until a new technology style appears. So the shape of a style life cycle is like a wave, as one style fades out, another appears.
2. PRODUCT LIFE CYCLE FOR FASHION PRODUCTS
a) A fashion refers to a currently accepted style in a specified field. It is a current trend which can have a long or short life cycle.
b) Fashion tends to grow slowly, remain popular for a while then decline slowly.
c) The product for the product increases at a faster rate, reaches its top and with the change in fashion, the product life enters to decline stage. E.g. readymade garments, purses, bangles, shoes, etc.
3. PRODUCT LIFE CYCLE FOR FAD PRODUCTS
a) Fads are fashions that enter quickly with greater zeal, peak early and decline quickly.
b) A fad is a product that is around for a short period. E.g. garments, caps, hairstyles, music albums, films and other fashion products.
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