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:
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.
Cite This Essay
(2010, 08). Product Life Cycle. StudyMode.com. Retrieved 08, 2010, from http://www.studymode.com/essays/Product-Life-Cycle-387951.html
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"Product Life Cycle." StudyMode.com. 08, 2010. Accessed 08, 2010. http://www.studymode.com/essays/Product-Life-Cycle-387951.html.