What Is Product Life Cycle?

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All products and services have certain life cycles. The life cycle refers to the period from the product’s first launch into the market until its final withdrawal and it is split up in stages. A new product progresses through a sequence of stages from introduction to growth, maturity, saturation & decline. This sequence is known as Product Life Cycle (PLC). The product life cycle is generally termed as product market life cycle, because it is related to a particular market. The product life cycle may be short for some products and long for some other products. The period may differ from product to product.

Stages of PLC
1. Market introduction stage costs are high
slow sales volumes to start
little or no competition
demand has to be created
customers have to be prompted to try the product
makes no money at this stage
2. Growth stage costs reduced due to economies of scale  sales volume increases significantly
profitability begins to rise
public awareness increases
competition begins to increase with a few new players in establishing market  increased competition leads to price decreases
3. Maturity stage costs are lowered as a result of production volumes increasing and experience curve effects  sales volume peaks and market saturation is reached
increase in competitors entering the market
prices tend to drop due to the proliferation of competing products  brand differentiation and feature diversification is emphasized to maintain or increase market share  Industrial profits go down

4. Saturation and decline stage costs become counter-optimal  sales volume decline or stabilize
prices, profitability diminish
profit becomes more a challenge of production/distribution efficiency than increased sales

Market Research
History- Market research began to be conceptualized and put into formal practice during the 1920s, as an...
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