A Product in its life cycle under goes a lot of stages, sales and profit of a product shows a lot of variation in each stage so it becomes important for a marketer to know the marketing situation and where his product is placed in Product Life Cycle (PLC),thus impacting the marketing strategy and the marketing mix. Knowledge of the product’s life cycle can provide valuable insights into ways the product can be managed to enhance sales and profitability. Marketing activities are heavily dependent on the stage in the product life cycle.
Product Life Cycle has four stages:
- Introduction
- Growth
- Maturity
- Decline
In reality very few products follow such a prescriptive cycle. The length of each stage varies enormously. For example Fashion products tend to have a short life cycle i.e. the time between the launch of a product and the point at which the product is mature is very quick.
Recommended Reading: Product life cycle concept
The decisions of marketers can change the stage, for example from maturity to decline by price-cutting.
- Competition – At the introductory stage, competition is given no importance. At the growth stage, it is given a little importance while at the maturity stage, there are many rivals in the market. Slowly, however, the number of competitors or rivals get reduced with the declining stage.
- Overall Strategic Focus – At the first stage, emphasis is laid on market establishment. At the growth stage, market penetration and persuasion of mass market are emphasized. Creation of brand loyalty and brand preferences is focused at the maturity stage. At the decline stage, the strategy aims at overall preparation for renewal.
- Profit – At the introductory stage, profits are negligible but at the growth stage, they reach the peak levels as a result of growing demand. At the maturity stage, they decline due to the increasing competition. At the last stage, the declining volume pushes costs up and eliminates profits.
- Distribution Strategies – At the introductory stage, distribution is selective. However, at the growth and maturity stages, it is intensive. At the decline stage, it becomes selective and hence low-end strategies are used.
- Advertising Strategies – At the introduction stage, advertising strategies aim at the needs of early adopters; at the growth stage, an attempt is made to make the mass market aware of brand benefits. At maturity stage, advertising is used as a vehicle for differentiating among otherwise similar brands. At the last stage, however, it emphasizes on low price of the product and minimum advertising expenditure.