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Product Life-Cycle
Asst. Prof. Sovan Mangaraj
Innovation The Business School
sovan@ibschool.org.in

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Product Life Cycle

The product life cycle is an important concept in marketing. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market. Not all products reach this final stage. Some continue to grow and others rise and fall.

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Product Life Cycle

Sales and Profits Sales

Profits Time Product Development Losses/ Investments Introduction Growth Maturity Decline

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Introduction Stage of the PLC

Sales Costs Profits
Marketing Objectives

Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Build selective distribution Build product awareness among early adopters and dealers

Product Price Distribution Advertising

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Growth Stage of the PLC

Sales
Costs Profits
Marketing Objectives

Rapidly rising sales

Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market Build intensive distribution Build awareness and interest in the mass market

Product Price Distribution Advertising

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Maturity Stage of the PLC

Sales
Costs Profits
Marketing Objectives

Peak sales
Low cost per customer High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits

Product Price Distribution Advertising

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Decline Stage of the PLC

Sales
Costs Profits
Marketing Objectives

Declining sales
Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers

Product Price Distribution Advertising

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