PRODUCT LIFE CYCLE

• Four Wheeler Car - Product as a whole

800 or 1000 cc Car - Category
SX4 / i20 - Brand
• Products have limited life spans and they go
through different stages of growth.
• Judgement of PLC depends on the Techno -
logical complexities of the product
• A typical PLC looks like a parabola

SEM - II MARKETING MANAGEMENT

 PRODUCT LIFE CYCLE
• PLC concept offers guidance for product
planning
• The need for a set of policies that direct the
search for new products
• Acceptance of PLC concept recognizes -
1.Products can be displaced
2.Profit per unit follows the sales curve
3.Market conditions vary at different stages

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
1. INTRODUCTION :
Characteristics
• Sales Slow Growth
• Profits Negative
• Cash Flow Low
• Customers Innovative (Limited)
• Competition Limited

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
1. INTRODUCTION (cont.)
Responses
• Strategic Focus - Build Awareness
• Marketing Expenditure - Very High
• Marketing Emphasis - Create Primary
demand
• Distribution - Limited
• Price - Low or High
• Product - Very limited
SEM - II MARKETING MANAGEMENT
 STAGES OF PLC
2. GROWTH:
Characteristics
• Sales Fast Growth
• Profits Peak Levels
• Cash Flow Moderate
• Customers Mass Market
• Competition Growing

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
2. GROWTH (cont.)
Responses
• Strategic Focus - Market Penetration
• Marketing Expenditure - High (declining %)
• Marketing Emphasis - Brand Preference
• Distribution - Intensive
• Price - Lower
• Product - Improved

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
3. MATURITY :
Characteristics
• Sales Slow Growth
• Profits Declining
• Cash Flow High
• Customers Mass Market
• Competition Many Rivals

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
3. MATURITY (cont.)
Responses
• Strategic Focus - Defend Market Share
• Marketing Expenditure - Falling
• Marketing Emphasis - Brand Loyalty
• Distribution - Intensive
• Price - Lowest
• Product - Differentiated

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
4. DECLINE PHASE :
Characteristics
• Sales Decline
• Profits Low (to negative)
• Cash Flow Low
• Customers Laggards
• Competition Declining Numbers

SEM - II MARKETING MANAGEMENT

 STAGES OF PLC
4. DECLINE PHASE (cont.)
Responses
• Strategic Focus - Productivity
• Marketing Expenditure - Low (going down)
• Marketing Emphasis - Selective
• Distribution - Selective
• Price - Rising
• Product - Rationalised

SEM - II MARKETING MANAGEMENT

 PRODUCT LIFE CYCLE
• Types of Product Life Cycle :
1. S - Shaped Curve
2. Truncated Curve
3. Sky Rocket Cycle
4. Fashion Cycle
• Effective Marketeer does not only predict, but
also influence a Product Life Cycle.
• Length of PLC depends upon -
1. Needs the product satisfies
2. Changes in the Market Conditions
3. Competitive Activity
4. Marketing Strategy of Company
SEM - II MARKETING MANAGEMENT
 STRATEGIES FOR MATURITY
& DECLINE PHASE
1. Product Enhancement :
Company makes minor changes in the
product.
e.g. Lifeboy Soap
2. Product Migration :
Whenever the new brand gets established,
company drops previous brand
e.g. Microsoft

SEM - II MARKETING MANAGEMENT

 STRATEGIES FOR MATURITY
& DECLINE PHASE
3. Product Re-positioning :
Company changes the product positioning
through conscious efforts.
e.g. Monaco Biscuits

SEM - II MARKETING MANAGEMENT

 PRODUCT DESIGN
• Introductory Stage
– Basic Model
• Growth Stage
– Improved Model
– New Variants
• Maturity Stage
– Several Models
– Differentiate from Competitors
• Decline Stage
– Cut Back
– Rationalise
SEM - II MARKETING MANAGEMENT
 PROMOTION STRATEGY

• Introductory Stage
– Inform, Education, Induce trials
– High Expenditures

• Growth Stage
– Increase Penetration, Expand Usage
– High Expenditures

SEM - II MARKETING MANAGEMENT

 PROMOTION STRATEGY
• Maturity Stage
– Defend Share
– Differentiate from Competition

• Decline Stage
– Harvest
– Low Expenditure

SEM - II MARKETING MANAGEMENT

 PRICING STRATEGY
• Introductory Stage
– High Price
• Growth Stage
– Medium Price
• Maturity Stage
– Low Prices
• Decline Stage
– raise from low to Medium prices

SEM - II MARKETING MANAGEMENT

 PLC APPLICATIONS
• To suggest appropriate functional area
emphasis by stages of the cycle
• To suggest appropriate brand strategy
alternatives
• To time strategy changes
• To assess the balance of a corporate portfolio
of balance units to ensure that developing
products are introduced as others pass
through growth to maturity
SEM - II MARKETING MANAGEMENT
 PLC EXTENTIONS
• Emphasizing new uses of product

• Penetrating new markets

• Improving the Product

• Promoting more frequent usage

• Finding new uses for basic materials

SEM - II MARKETING MANAGEMENT