Product Life Cycle
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Transcript of Product Life Cycle
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Explains the concept of product life cycles
Product Life CyclesProduct Life Cycles
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ProductLife Cycle (PLC)
A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death).
Product Life Cycle
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Four Stages of the Product Life CycleFour Stages of the Product Life Cycle
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Life-Cycle Management
Entry Strategies
Managingonthe Rise
Survivingthe Decline
GrowthIntroduction Maturity Decline
Managingduring Maturity
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Introductory Stage
High failure rates Little competition Frequent product modification Limited distribution High marketing and production costs Negative profits with slow sales increases Promotion focuses on awareness and
information Communication challenge is to stimulate
primary demand
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Growth Stage
Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Aggressive advertising of the
differences between brands Wider distribution
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Maturity Stage
Sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important roles Heavy promotions to consumers and dealers Marginal competitors drop out Niche marketers emerge
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Decline Stage
Long-run drop in sales Large inventories of
unsold items Elimination of all nonessential
marketing expenses “Organized abandonment”
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Product Life-Cycle Stages
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Product-Market Growth Matrix
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The BCG Matrix
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The GE Business Screen
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Length of Product Life-Cycle
Product life-cycle variations
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Planned Obsolescence
TechnologicalObsolescence
StyleObsolescence
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Relationships between the Diffusion Process and the Relationships between the Diffusion Process and the Product Life Cycle Product Life Cycle
Productlife cyclecurve
Diffusioncurve
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1. Increase frequency of use by present customers
2. Add new users
3. Find new uses
Extending the Product Life Cycle
Market Modification
Product Modification
Purpose: to sell more product and cover original investment
4. Change product quality or packaging
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Extending the product Cycle• to prevent the product going into
decline you need to modify the market
MARKET MODIFICATION • you look for new consumers by changing
the product so it has new users
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• to prevent the product going into decline you need to modify the product PRODUCT MODIFICATION
• adding new features, variations, model varieties will change the consumer reaction - create more demand
Extending the product Cycle
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Some cases