PRODUCT LIFE CYCLE:
-Successful new products may not last forever, during its life. Sales /profits generated for by-product may vary. -Variance depends on the market demand for product changing needs level is described by demand cycle curve such as:
-Demand may also decline due to a change in technology.
-Based on demand for a product it may be possible to create a concept that provides insights of the product’s competitive dynamics. This is called PRODUCT LIFE CYCLE. -PLC concept implies:
Products have a limited life.
Product sales pass through distinct stages with each stage posing Challenges/Opportunities/ Problems. Profits rise/fall during different stages of product life cycle. Products require different marketing/manufacturing./ finance/ purchase/ HR strategies at each stage of Product Life Cycle. -In most cases historical/ empirical data shows the sales/profits of a product as following a pattern (as per diagram) -Pattern is:
- Product Life Cycle curve is typically divided into 4 stages: • Introduction:
Product introduced in market.
Slow sales growth.
No profits as expenses are high.
Period of rapid market acceptance.
Sales growth slows down.
Profits stability then decline to fight competition.
-Stages are marked by changes in rates of sales growth.
PLC concept can be used to analyse:
Product category (liquid/oral care/ skin care).
Product form (white liquid/paste/cake).
Products(vodka/ toothpaste/ soap).
Brands(Smirnoff/ Colgate herbal/ Lux).
-Product categories have largest PLC’s. Many product category stay in maturity stage of PLC indefinitely. - Product forms follow PLC structure, i.e., better than product category as they pass through I/G/M/D strategies faster. -Products follow std. PLC or PLC variances.
-Brands have shorter PLC’s however their PLC’s may be structured by investing brand with suitable products & image.
-There may exist many PLC patterns in addition to standard PLC. Some common variants are:
(1) Growth/Slump/Maturity Pattern
-Sales grow, and then fall to petrified level.
-Example: Small kitchen appliances (Spoons), Cease fire.
(2) Cycle-Recycle Pattern:
-Sales grow, then decreases.
-Company gives another promotion push for another smaller growths. -Example: Pharmaceuticals.
(3) Scalloped Pattern:
-Sales pass through a series of PLC’s due to discovery of new uses/characteristics. -Example: Nylon.
Style / Fashion / Fad Life Cycle:
-Three special categories of PLC need to be distinguished.
-PLC’s pertaining to Style/Fashion/Fad.
-style is a basic/distinctive mode of expression
appearing in a field of human endeavors.
-Once a style is invented, it can last for generations,
at times going in/ going out.
oExample: Styles in Home, Clothes.
-Fashion is a currently accepted/popular style in a
oExample: Clothes: Jeans.
-Fashion Pass through four Stages:
Same customer take interest in something new that sets them apart. oEmulation Stage:
Other customers take an interest out of desire to emulate fashion leaders. oMass-Fashion Stage:
Fashion becomes very popular & manufacturing gear up for mass production. oDecline:
Consumer starts moving towards other fashion.
-Fads are fashion that comes quickly into the public
eye, are adopted with great zeal, peak easily and
-Acceptance cycle is short.
-Fads tend to have limited followings
-Example: Body Piercing, Tattooing, Pepsi Blue.
Marketing Strategies through PLC:
-Marketing strategy differs based on PLC stage of product.
•Starts when New...