Product Life Cycle (PLC)

The product life cycle (PLC) is the course of a product’s sales and profits
over its lifetime.

The graph that is produced when you plot the sales of any product (or
product category) against time is called the Product Life Cycle Curve. We
normally think of it as looking like a bell curve, but it can actually take almost
any shape.
Product Life Cycle Stages: There are five distinct product life cycle stages:
1. Product Development. When the company finds and develops a new product idea, product
development starts. During product development, sales are zero, and the company’s investment
costs increase.
2. Introduction. Sales slowly grow as the product is introduced in the market. Profits are still non-
existent, because the heavy expenses of the product introduction overweigh sales.
3. Growth. The growth stage is a period of rapid market acceptance and increasing profits.
4. Maturity. In the maturity stage, sales growth slows down because the product has achieved
acceptance by most potential buyers. Profits level off or decline because marketing outlays/efforts
need to be increased to defend the product against competition.
5. Decline. Finally, sales fall off and profits drop.
Different Products – Different Product Life Cycle Stages
Not all products follow all five stages of the product life cycle. While some products are
introduced and die quickly afterwards, others stay in the mature stage for a very long time.
Some are cycled back into the growth stage after reaching the decline stage through
strong promotion or repositioning. In fact, a well-managed brand could live forever if wise
strategies are applied.

Pharma examples : Cox-2 inhibitors/PPI: Rofecoxib/Esomeprazole/ Paracetamol brand:

Tylenol/Panadol/Reset.

Examples include Coca-Cola, Gillette, American Express, which still live on after more
than 100 years.
Product class, Form or Brand in the Product Life Cycle Stages
The PLC concept can also describe a product class (for instance petrol-powered
cars/Lipid lowering drugs/Antiplatelets), a product form (e.g. 4-wheel
drives/Statins/Ticagrilor) or a brand (such as the BMW X5/Lipitor/Ticarel). In each case,
the PLC concept applies differently.

While product classes have the longest life cycles, staying in the maturity stage for a
long time, product forms tend to have the standard PLC shape.
The product life cycle stages can be used to describing how products and
markets work. When used carefully, the PLC concept can be a great help
in developing good marketing strategies for the different product life cycle
stages. However, using the PLC concept for forecasting product
performance or developing marketing strategies brings some practical
problems.
For example, it is (i) difficult to forecast the sales level at each of the product life
cycle stages, as well as the (ii) length of each stage and the (iii) overall shape of
the PLC curve.

Also, the marketing strategy is both the cause and the result of the product life
cycle. The best option is to use a product’s current position in the product life
cycle in order to develop marketing strategies. The resulting strategies will then
affect the product’s performance in later product life cycle stages.
The idea behind the PLC concept is that ”companies must continually
innovate”. Regardless of the success of a company’s current product line-up,
it must skillfully manage the product life cycles of existing products for future
success. In order to grow, it must develop a steady stream of new products
that offer new value to customers.
Consumer Adoption Curve

Product Adoption affects every single business.

At the macro level, we have market forces at play. This concept is captured best by the 
Product Life Cycle.  The essence of this framework is that a product will go through the
stages of development from creation to obsolescence.

The Product Life Cycle is often mapped against the Consumer Adoption Curve (one of the
best known marketing frameworks).  By doing this, we can determine the ideal market
segment to go after at each stage of the product’s lifecycle.
To use this framework, we need to determine two things:

1. What stage in the Product Life Cycle we are in.

2. What segment on the Consumer Adoption Curve to go after.

Each stage of the Product Life Cycle is typified with a unique set of characteristics. Likewise,
different strategies are best suited for the different stages. They are as follows:

• Introduction.  In the initial stage, pricing is critical. We need to address the key question that drives
Pricing Strategy: do we want to penetrate or to skim the market? Penetrating the market implies
stronger consumer adoption, but at the trade off of higher margins and possibly profits.
•Growth. In this stage, the focus shifts to Customer Satisfaction, so that we can build customer

loyalty and drive repeat purchases.  As portrayed in the diagram,  we are now at the brink of

breaching the Early Majority market.

•Maturity.  Depending on the competitive dynamics in the industry, companies will elect to

employ one of three strategies: Maintain, Defend, or Innovate.

•Decline. In the final stage of the product’s lifecycle, we need to make the decision to focus on

innovation or make a calculated exit.

By knowing what phase of the lifecycle we are in, we have identified the general corporate strategy.
 We can now also identify the prevailing customer group, as defined by the Consumer Adoption Curve.
There are five distinct customer groups, each characterized by a set of beliefs, motivations, and
behaviors:
• Innovators.  Innovators are the first to adopt a new product. They are willing to take risks, youngest
in age, have the highest social class, have great financial liquidity, are very social and have closest
contact to influential sources and interaction with other innovators.
• Early Adopters. This is the second fastest category of individuals who adopt an innovation. Early
Adopters have the highest degree of opinion leadership among the other adopter categories. They
are typically younger in age, have a higher social status, have more financial liquidity, advanced
education, and are more socially forward than late adopters.
• Early Majority. Individuals in this category adopt our product after a varying degree of time. This time
of adoption is significantly longer than the Innovators and Early Adopters. Early Majority tend to be
slower in the adoption process, have above average social status, have contact with Early Adopters,
and seldom hold positions of opinion leadership or influence.

• Late Majority. Late Majority folks will adopt an innovation after the average member of society. They
approach a new product with a high degree of skepticism and only after the majority of society has
adopted the product already. They are also typically skeptical about an innovation, have below
average social status, very little financial liquidity, in contact with others in early majority, very little
opinion leadership.
Laggards. These guys are the last to adopt. These individuals typically have an aversion to
change and tend to be advanced in age. Laggards typically tend to be focused on “traditions,”
likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in
contact with only family and close friends.

The drawback of Product Life Cycle is that it is only a market-focused framework. It

doesn’t address other critical drivers to adoption, such as the Product itself
and Consumer Psychology.
You may have your overarching marking mix right, but if you fail at the tactical and
execution level, your product will fail.
Product /
The demographic and psychological (or "psychographic") profiles of each adoption group are

• Innovators – are more educated, more prosperous and more risk-oriented

• Early adopters – younger, more educated, tended to be community leaders, prosperous
• Early majority – more conservative but open to new ideas, active in community and
influence to neighbors
• Late majority – older, less educated, fairly conservative and less socially active
• Laggards – very conservative, had small capital, oldest and least educated
 Decline/Growth
Maturity Strategy/Repositioning/
New Indication

Growth

PRODUCT
SALES

EXTENSION

Introduction

INTRODUCTION GROWTH MATURITY DECLINE

TIME
ample from the Pharmaceuticals Sector
Enoxaparin : Low molecular weight Heparin.
Brands: Parinox/Clexane/Lovenox.
Anticoagulant medication (blood thinner).
Predominant use in our country is for Acute Coronary Syndrome (ACS) and heart
attacks. So Cardiologists use this product mainly.
Recent focus is to treat Deep Vein Thrombosis (DVT) and pulmonary embolism (PE)
including during pregnancy and following certain type of surgery.
Avastin: (bevacizumab) Injection, for Intravenous Use
FDA approved INDICATIONS
• Metastatic Colorectal Cancer (mCRC) Avastin, in combination with intravenous 5-
fluorouracil-based chemotherapy, is indicated for the first- or second-line treatment
of patients with metastatic colorectal cancer.
• First-Line Non-Squamous Non–Small Cell Lung Cancer (NSCLC)
• Metastatic Renal Cell Carcinoma (mRCC)
• Persistent, Recurrent, Or Metastatic Cervical Cancer
• Epithelial Ovarian, Fallopian Tube, Or Primary Peritoneal Cancer
Avastin (Bevacizumab) is an anti-growth factor drug (anti-VEGF). Intravitreal
Avastin (here called IVA) is an injection of the anti-VEGF drug Avastin into the
vitreous cavity of your eye.

The drug is used to reduce

1. Macular edema, that is fluid at the back of the eye, occurs in diabetes (or retinal
vein occlusion or other macular disease such as ARMD)
2. Reduce new vessel growth in these conditions.
Take a break