Chapter: - 7.
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) -
- 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:
(liquid/oral care/ skin care).
(vodka/ toothpaste/ soap).
(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. -
(3) Scalloped Pattern:
Sales pass through a series of PLC’s due to discovery of new uses/characteristics. -
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.
Example: Styles in Home, Clothes.
Fashion is a currently accepted/popular style in a
Example: Clothes: Jeans.
Fashion Pass through four Stages:
Same customer take interest in something new that sets them apart. o
Other customers take an interest out of desire to emulate fashion leaders. o
Fashion becomes very popular & manufacturing gear up for mass production. o
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...
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