Product Life-Cycle Strategies

Product life-cycle (PLC) is the course that a product’s sales and profits take over its lifetime.

• Product development
• Introduction
• Growth
• Maturity
• Decline

 

 

Introduction stage is when the new product is first launched.

Takes time

Slow sales growth

Little or no profit
High distribution and promotion expense

 

 

Growth stage is when the new product satisfies the market. Sales increase

New competitors enter the market
Price stability or decline to increase volume
Consumer education
Profits increase
Promotion and manufacturing costs gain economies of scale
Product quality increases
New features
New market segments and distribution channels are entered

 

 

Maturity stage is a long-lasting stage of a product that has gained consumer acceptance.
Slowdown in sales
Many suppliers
Substitute products
Overcapacity leads to competition
Increased promotion and R&D to support sales and profits.

 

 

Decline stage is when sales decline or level off for an extended time, creating a weak product.
Maintain the product
Harvest the product
Drop the product

 

 

Modifying Strategies

Market modifying strategy is when a company tries to increase consumption of the current product.

• New users
• Increase usage of existing users
• New market segments

Marketing mix modifying strategy is when a company changes one or more of the marketing mix elements.

• Price
• Promotion
• Distribution channels

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