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Mrs. Khyati Kapil Gaurav Jyoti
MBA “N” Section
Definition
A new product progresses through a sequence
of stages from Introduction to Growth, Maturity
and Decline. This sequence is known as the
Product Life Cycle and is associated with
changes in the marketing situation, thus
impacting the marketing strategy and marketing
mix. A product revenue and profits can be
plotted on life cycle stages .
The Product Life Cycle
A product's life cycle (PLC) can be divided into several

stages characterized by the revenue generated by the
product. If a curve is drawn showing product revenue
over time, it may take one of many different shapes .
Product Life Cycle Curve
Product Life Cycle with
Profit Curve
Sales/Profits PLC and Profits
PLC
Profits
Time
Losses
Break Even
Introduction Stage
When the product is introduced, sales will be low until customers
become aware of the product and its benefits. Some firms may
announce their product before it is introduced, but such
announcements also alert competitors and remove the element of
surprise.
Product - Branding and quality is maintained.
Pricing - Low penetration.
Distribution - Selective until consumers show acceptance to the

product.
Growth Stage
The growth stage is a period of rapid revenue growth. Sales increase
as more customers become aware of the product and its benefits and
additional market segments are targeted.
Product – Quality is maintained and additional features and support

services may be added .
Price - Maintained at a high level if demand is high., or reduced to

capture additional customers.
Distribution - Distribution becomes more intensive.
Promotion - Increased advertising to build brand preference.

Maturity Stage
The maturity stage is the most profitable. While sales continue to increase
into this stage due to brand awarenes, advertising expenditures will be
reduced. Sales promotions may be offered to encourage retailers to give the
product more shelf space over competing products to remain competitive in
the market.
Product - Modifications are made and features are added in order to

differentiate the product from competing products that may have been
introduced.
Price – May be low because of new competition.
Distribution - New distribution channels and incentives to resellers in order to

avoid losing shelf space.
Promotion - Emphasis on differentiation and building of brand loyalty.

Incentives to get competitors' customers to switch.
Decline Stage
Eventually sales begin to decline as the market becomes saturated, the
product becomes technologically obsolete, or customer tastes change. If the
product has developed brand loyalty, the profitability may be maintained
longer.
During the decline phase, the firm generally has three options:
Maintain the product in hopes that competitors will exit. Reduce costs and
find new uses for the product.
Harvest it, reducing marketing support and coasting along until no more
profit can be made.
Discontinue the product when no more profit can be made or there is a

successor product.
Summary of PLC Characteristic ,
Objective and Strategies
Charecteristic Introduction Growth Maturity Decline
Sales Low sales Rapidly increasing sale Peak sale Declining sale
Cost High cost Average cost Low cost Low cost
Profit Negative Rising profit High profit Declinning profit
Customer Innovators Early adopters Middle majority Laggards
Marketing objective Create product awareness Maximize market share Maximize profit while Reduce expenditure and
and trial defending market milk the brand
share
Price Charge cost-plus Price to penetrate market Price to match the best Cut prise
competitor
Distribution Build selective Build intensive Build more intensive Go selective ,phase out
distribution distribution distribution unprofitable outlets
Advertising Build produvt awareness Build awareness and Stress brand difference Reduce to level needed
among early interest in the mass and benefit to retain hard core-
adopters and dealers market loyals
Sales promotion Use heavy sales Reduce to take advantage Increase to encourage Reduce to minimal level
promotion to entice of heavy consumer brand switching
trial demand
Criticism Of PLC concept
 No way to predict the length of each phase.
 It can not be used Sales Forecasting
 It can be self fulfilling
 Needs wide range of data to analyze the

Product phase
Conclusion
The Product Life Cycle describes how Product
goes through the four stages and the different
mix of marketing activities in each phase is done
to maximize the profitability of the product .
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A product's life cycle (PLC) can be divided into several

Product - Branding and quality is maintained.

Pricing - Low penetration.

Distribution - Selective until consumers show acceptance to the

Product – Quality is maintained and additional features and support

Price - Maintained at a high level if demand is high., or reduced to

Distribution - Distribution becomes more intensive.

Promotion - Increased advertising to build brand preference.

Product - Modifications are made and features are added in order to

Price – May be low because of new competition.

Distribution - New distribution channels and incentives to resellers in order to

Promotion - Emphasis on differentiation and building of brand loyalty.

Discontinue the product when no more profit can be made or there is a

 It can not be used Sales Forecasting

 It can be self fulfilling

 Needs wide range of data to analyze the

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