The Product Life Cycle
Product life cycle is made based on the biological life cycle. Most projects goes through similar stages on the path from origin to completion. Johnson (2012) stated that product life cycle (PLC) is a trend whereby a brand new and original product become out-of-date and gradually obsolete (Johnson, 2012). There are four major phases in the project life cycle as shown in Figure 1 (refer to Appendix). These major phases are introduction stage, growth stage, maturity stage and decline stage.
The product life cycle starts with the introduction stage. During this stage, marketing strategies change from time to time to meet market demand in relation to its competition, pricing, distribution, promotion and market information to ensure that marketers can maintain profitable product mixes. As mentioned by Pride et al. (2007), “the introduction stage of the product life cycle begins at a product’s first appearance in the marketplace” (p. 205). In other words, the sales are at zero point and profits are negative because the customers have not known about the product. In a typical profit versus time graph for a product life cycle, the shape resembles the letter “s”. Profits are below zero point because the revenues are low and the manufacturer generally must cover large expenses for product development, promotion and distribution. Introduction stage commonly starts with promoting the new products (Pride et al., 2007, p. 205). Potential buyers should be given details about the new product’s features, uses and advantages. To achieve this, the seller should have adequate amount of resource, technological knowledge and marketing know-how to launch the product successfully. Giving free samples, gain visibility through media appearances are among the most popular ways of advertising products. Considerable research and development fee might have been paid to get the product to introduction phase (Marketing – Products – Product life cycle, 2012). The initial product price should be high to recoup expensive market research and development cost. These obstacles are among the reason why many products can never survive the introduction stage. Most of the new products start off slowly and seldom generate enough profit to bring immediate profits. Pride et al. (2007) says that seller should be alert for any weakness or disadvantages that customers reported. Improvements must be made immediately to prevent the product’s early demise and loses in customer interest. As the sales move upwards, the break-even point is reach and competitors enter the market, the growth stage begins. For example, a new laptop brand entered the market always loses in terms of profit. This company can promote the product before the launch date so that customer can get to know the product and anticipate the launching of the product.
Once the introductory phases have taken place, the growth stage begins. The growth stage is the stage in which one product is being accepted and it is a period of rapid revenue growth. Its’ goal is to encourage brand loyalty. According to Komninos (2002), the growth stage derives the contentment of seeing the product rolled out and become popular in the market place and in fact it is a suitable period in which the market share of that particular product can be fully-controlled and risen (Komninos, 2002). Once the product has been successfully gained popularity among the society, the demand in the market increase at the same time. Hence, the sales increase further as more customers and retailers are interested in it. For instance, the high demand for Asus laptop in Malaysia has increased substantially with increased access to wireless technology and lighter weight. Laptops have also become easier and cheaper to produce as new technology has come online. Consequently, the sales volume of Asus laptops increase significantly and the companies gain profits as they fulfill the economies of scale which in turn resulted in...
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