Product Life Cycle –a Product Life Cycle –a marketing Strategy marketing Strategy

(Marketing)(Marketing)Shivsagar Mukherjee

MBA SEM-II(IASE UNIVERSITY)A.P.I.M.

Learning ObjectiveLearning Objective

• Understanding the meaning of PRODUCT LIFE CYCLE

• Learn about the stages of PRODUCT LIFE CYCLE

• What are the various marketing strategies used in different stages of Product Life cycle ?

• Demerits in using the life cycle technique for assessing the life cycle of a product.

Definition Definition

• The product life cycleproduct life cycle is a concept that seeks to describe a product’s sales, competitors, customers, and marketing emphasis from its beginning until it is removed from the market.

• Companies often desire a balanced balanced product portfolioproduct portfolio.

• The life-cycle concept can be applied to a product class, a product form, and a product brand.

Applications of Product Life Applications of Product Life CycleCycle

• Product class - has the longest life cycle (e.g., gas-powered cars)

• Product form -tends to have the standard PLC shape (e.g., dial telephone)

• Brand - can change quickly because of changing competitive attacks and responses (e.g., Tide, Cheer)

• Style - is a basic and distinctive mode of expression (e.g., formal clothing, Danish modern furniture)

• Fashion -is a popular style in a given field (e.g., business casual)

• Fad -is a fashion that enters quickly, is adopted quickly, and declines fast (e.g., pet rocks)

Figure ofFigure ofStyles, Fashions, FadsStyles, Fashions, Fads

Stages Of Product Life CycleStages Of Product Life Cycle

• Introduction Stage• Growth Stage• Maturity Stage• Decline Stage

– Deletion– Harvesting

Generalised Graph of PLC Generalised Graph of PLC

Sales Cycle of productSales Cycle of product

Description of stages of plcDescription of stages of plc

• Introduction Stage:

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Low sales Low sales

High cost per customerHigh cost per customer

NegativeNegative

Create product awareness and trial

Create product awareness and trial

Offer a basic productOffer a basic product

Use cost-plus Use cost-plus

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build product awareness among early adopters and dealers

Build product awareness among early adopters and dealers

Description Cont.Description Cont.

• Growth Stage of PLC:

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Rapidly rising sales Rapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

Maximize market shareMaximize market share

Offer product extensions, service, warranty

Offer product extensions, service, warranty

Price to penetrate marketPrice to penetrate market

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertising Build awareness and interest in the mass market

Build awareness and interest in the mass market

Description Cont.Description Cont.

• Maturity stage of PLC:

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defending market share

Maximize profit while defending market share

Diversify brand and modelsDiversify brand and models

Price to match or best competitors

Price to match or best competitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

AdvertisingAdvertising Stress brand differences and benefits

Stress brand differences and benefits

Maturity stage of PLC Cont.Maturity stage of PLC Cont.

• Modifying the Product: – Changing characteristics such as quality, features,

or style to attract new users and to inspire more usage.

• How?– Improve durability, reliability, speed, taste.– Improve styling and attractiveness.– Add new features.– Expand usefulness, safety, convenience.

Elongating the Maturity Elongating the Maturity Stage:Stage:

• Modifying the Product :

Gillette’s Fusion razor combines a precision trimmer blade (on back) with a five blade shaving surface (on front). The flexible comfort guard and Enhanced Indicator Lubrastrip (containing vitamin E and aloe) enhance shaving comfort.

Continuing the Maturity Continuing the Maturity Stage of PLCStage of PLC

• Modifying the Marketing Mix: – Improving sales by

changing one or more marketing mix elements.

• How? – One method is to

launch aggressive sales promotion programs, such as rebates.

Retention of maturity stage Retention of maturity stage of PLCof PLC

• Modifying the Marketing Mix, cont.: – Improving sales by changing one or more

marketing mix elements.

• How Else Can This Be Accomplished?– Cutting prices.– Launching a better ad campaign.– Moving into larger market channels, including

mass merchandisers.– Offering new or improved services to buyers.

Description Cont:Description Cont:

• Decline stage of PLC:

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and milk the brand

Reduce expenditure and milk the brand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution Go selective: phase out unprofitable outlets

Go selective: phase out unprofitable outlets

AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers

Reduce to level needed to retain hard-core loyal customers

More of Decline Stage Of More of Decline Stage Of PLC:PLC:

• In Decline stage is fresh oxygen possible to inoculate in the Product? How?

Shred the Dead , as dead are contagious for Health.Harvest new crop for the new season as it unleashes fresh life into the product.

Decline graph of PLC:Decline graph of PLC:

• Focus on the Decline part of this Graph of PLC:

Prediction of PLCPrediction of PLC

• Which stage of the PLC?• How do you know?

Attention Please:Attention Please:

• Why Profit peak before Sales?

Cost and profit Graph in PLCCost and profit Graph in PLC

• Analyse it ?

Cost

Break Even

Demerits of PLC TechniqueDemerits of PLC Technique

• Hard to identify which stage of the PLC the product is in.

• Hard to pinpoint when the product moves to the next stage.

• Hard to identify factors that affect product’s movement through stages.

• Hard to forecast sales level, length of each stage, and shape of PLC.

• Strategy is both a cause and result of the PLC.

DiscussionsDiscussions

Debatable Question?• What is it?• Is really prediction possible in PLC

technique in times to come?

• Scratch your head please or please be in the process of innovating for the answer.

Thank you Thank you

• Thanks for your being so patient and a good listener

• Also thanks for the interest you all showed.

Thanking you again.

Queries:Queries:

ANY QUERIES ?