It may be noted that products may begin a new cycle or revert to an early stage as a result of (a) the discovery of new uses, (b) the appearance of new users, and (c) introduction of new features. One strategy company’s can try to use to avoid this is to announce the product before it is launched, hence building up customer anticipation. The most notable characteristic of the maturity stage is the peaking of the product’s sales and profit curves. Companies may try to revive aging products by redesigning packages and increasing convenience for the customers. It is expected that VCD (video compact disc) players will also pass through these stages (introduction, growth, maturity, and decline). Its time period vary from product to product. The stages that a product goes through is the product life cycle. Fourth, establishing adequate distribution may consume a fairly long time. The product is getting older and starts to shrink. Other critics suggest that there are no normal patterns for a product since each is so unique. A particular human need may be satisfied in many ways. People, for example, need traveling means, which grows and changes as time passes. It is found from different studies that life cycle patterns may vary from six to seventeen types, of which three are common. The development stage of the product life cycle is the research phase before a product is introduced to the marketplace. Four stages exist to the product life cycle after a product is introduced to the market. Instead of quickly recouping costs and generating profits as would occur with a skim strategy, the marketing executive hopes for even greater long-term profits. The product life cycle concept is also relevant to styles, fashions, and fads. During this stage, potential buyers must be aware of the product’s features, uses, and advantages, which cost a substantial amount of money to the firm. This is usually followed by a rapid expansion in its sales as the product gains market acceptance. one product can be directly shifted from introduction stage to decline. A company at this point has to look at the merits for revitalizing the product or allowing it to decline slowly, or killing it off and planning a replacement. The growth stage is critical to a product’s survival because competitive reactions to the product’s success during this period will affect its life expectancy. This situation compels weaker firms to withdraw themselves from the market, and as a result, only the competent ones survive. This stage is characterized by severe competition as many brands enter the market. The marketing manager must be aware of what stage in the life cycle the brand, as well as the product, has reached. Product life cycle consists of different stages that a product or brand must occupy in its life. Penetration strategy is normally used when the executive intends to keep the product on the market through all or most of the life cycle. Nevertheless, the PLC concept, if applied carefully, can help in developing good marketing strategies for different stages of the product life cycle. Companies always attempt to maximize the profit and revenues over the entire life cycle of a product. This can lead to companies focusing strongly on differentiating their product from competing offerings, and encouraging customers to switch to their offering. Learn how your comment data is processed. While some products fail immediately on birth or a little later, others may live long enough. Products with superior levels of brand loyalty will tend to maintain their profitability for longer, and will be helped as competitors enter the market. A particular style, after its invention, may also experience a life cycle. The product form the life cycle follows more or less the same pattern as the standard product life cycle. Some are popularized by lower socioeconomic groups and then move up the social ladder. In the introduction phase, the business firm tries to fabricate product awareness plus create a market for the product. Products generally go through a life cycle with predictable sales and profits. In order to achieving the desired level of profit, the introd… The key emphasis will be on promoting the new product, as well as making production more cost-effective and developing the right distribution channels to get the product to market. Reading: Stages of the Product Life Cycle. To survive in the face of extreme competition, firms increase their advertising, promotion, and research and development expenditures significantly. The PLC concept can be applied to a product class, a product form, or a brand. competition is either nonexistent or slim. New technology or a new social trend may cause the product to turn downward in sales sharply. Product classes have the longest life cycles – they stay in the mature stage for a long time. In order to achieving the desired level of profit, the introduction of the new product at the proper time is crucial. The cycle is shown on a graph with the horizontal axis as time and the vertical axis as dollars or various financial metrics. The remaining firms may reduce the variety they offer to make their operations more economical. The product life cycle concept indicates as to what can be expected in the market for a new product at various stages. 1.04 namely, Introduction, Growth, Maturity and Decline. The first strategy that a company may pursue regarding this is to do nothing and wait until there are no longer any orders for the item. Market rejects these products and compels to die. Although the concept of a product life-cycle has gained widespread acceptance, some experts question this approach. If a competitor hits upon a real improvement (perhaps based on an entirely new technology) and he markets it well, both sales and profits of the original technology) and he markets it well, both sales and profits of the original product innovator may decline drastically. However, companies want their products to enjoy long lives and expect lucrative profits out of their sales. if most potential buyers are informed of the product. Although firms have used both strategies successfully, penetration is the most common. Thus, the concept of product life-cycle facilitates integrated marketing policies relating to product, price, place and promotion/distribution. It is one of the most serious tasks of marketers to identify weak or marginal products. The T-shirt was initially popular among the lower classes, worn by laborers as a practical undergarment. To achieve the projected sales target, it formulates promotional, pricing and distribution policies. They try to maximize profits over the entire period. Every product launched in the market will have a life, the span of which can not be known earlier. Consumer created fashions are made popular by the public. It is an essential tool for analyzing the prospective success or potential of a new product through research and development. The introduction stage starts before the product is even released. Looking at the figure, you can see that each demand/technology life cycle follows the trend of emergence, accelerating growth, decelerating growth, maturity, and decline in that order. Still, it is a different world altogether, so ‘product development’ is not considered part of PLC. A fad is a fashion with a high degree of popularity among a particular group in the current period. The high price results in low sales during this stage. This concept is predominantly used by marketing professionals along with the management team because it is seen as the precursor for various … Looking at the figure, you can see a succession of product-form life cycles. For example, the VCPs (video cassette player) passed through the four stages of the life cycle. Next: Growth Stage At this stage, a company requires a highly efficient organization, such as a functional pyramid type, to maximize profits from steady sales. This strategy is used to maximize short-term profit. With proper marketing, a product can go into the growth stage. Some marketing experts speak of a fifth state, which is more developmental in nature. The product’s current PLC position suggests the most appropriate marketing strategies, and these strategies may influence product performance in later life-cycle stages. At this point, sales and revenues are usually low, as customers have not had much contact with the product, and can be slow to recognize the product as superior to previous offerings. This is because the company or the marketers don’t know … Now we can get to the good stuff, namely the life cycle stages themselves. The speed of degeneration differs from product to product. The life cycle of a product starts from the time it is introduced in the market and continues till the product is withdrawn. A particular fashion passes through four stages: the distinctiveness stage, emulation stage, mass-fashion stage, and decline stage. For this, planning for introduction of the product starts during the process of product development itself. The number of leaps depends on the number of new types of uses or users are discovered or the discovery of new product characteristics. When a product is commercialized, the product will enter the introduction stage of its life-cycle. During the growth stage, sales rise rapidly; profits reach a peak and then start to decline. Introduction Stage • It is the 1st stage, wherein the product is launched in the market with full scale production & marketing programme. Products that follow the growth slump maturity life cycle pattern experience rapid sales growth when they are first introduced in the market and gradually fall, settling at a solid level. Definition: Product life cycle can be defined as the analysis of the complete life span of a product.It is divided into five stages, i.e., development, introduction, growth, maturity and decline. The innovation of a new product and its degeneration into a common product is termed as the life cycle of a product. A particular product may either follow the shape of the standard product life cycle takes bell shape, or it may follow some other shapes discussed later this lesson. Products typically go through four stages: Introduction; Growth; Maturity ; Decline; After a period of development, the product is introduced or launched into the market. Marketing is about selecting strategies that are either designed to counteract threats or to take advantage of opportunities in the marketplace. Faced with a growing choice of products, the consumer may become confused and uncertain about selecting. The production runs become longer, and economies of scale are achieved, reducing per-unit cost, and also helping profits to increase rapidly. The difficulty, however, is that the executive must be knowledgeable about fashion if the company is to have much chance for success, investing considerable sums of money in research and development., and in the marketing effort. Profits remain large and mature products become the cash cows of the company, providing funds for the development of new products. Some products face quick death, and some remain in the mature stage for a long time; some products reverted to the growth stage through aggressive promotion or repositioning. Theory of international product life cycle propounded by Raymond Vernon emphasizes that every product has to pass through different stages. The committee of product review should consist of executives from marketing, production, purchasing, control, personnel, and research and development departments. Every firm makes sale projections during introduction, growth and maturity stage of the product life-cycle. The product life cycle is a very familiar term people know about it but very few are using it in an effective manner. This analysis will help the company decide on the strategies regarding the products. Product classes have the principal advantage of opportunities in the market shortly after their introduction because customers do not a... 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