PRODUCT LIFE CYCLE

PLC

• According to Philip Kotler,

“the product life cycle is an
attempt to recognize distinct
stages in the sales history of
the product”
 Stages in the life history of
product ( SLAES)

In
• PLC
t ro
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G
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TIME
Sales
Maturity
5 stages in PLC

De
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Wit
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 Introduction
• Sales revenue begins to grow along with market
demand
• Rate of growth is rather slow
• Profit may not be available due to low sales volume
supplemented by heavy prod’n / distribution cost
• Consumer purchases on trial basis
• Stage to remove deficiencies in the product
(suggested by the consumer)
• Product quality is very important
• Advertising should be more informative & educative
 Growth
• Product is accepted by customers & traders
• Market demand for product increases & the size of
market grows
• Sales turnover increases with speed
• Product gets good demand and support fm the
consumers
• Firm gives special attention to raise the volume of
sales.
• New consumers joins the existing users of the
product
• Dealers are encouraged to repeat orders
• Competition –oriented price is useful
 Maturity
• Sales turnover reaches at the highest level
• Demand tends at the saturation stage
• Competition in market & brings pressure on prices
• Price competition becomes intense
• Brings down profit
• Additional expenditure (product modification,
improvement, differentiation, & development)
• Special promotion are necessary to stimulate demand
• Relatively lower price, increased marketing costs,
keener competition, and lesser profits
 Decline
• Sales gradually goes down
• Due growing strength of competitor’s,
introduction of NP, limited support from
customers
• Product fails to get support from the market
• Expenditure on advertising, and sales
promotion will have to be brought down as such
expdn’s is adequately rewarded
• Consumers feels that the product is old
• Firms keep NP in a queue to fill up the vacuum
 withdrawal
• Firm comes to the conclusion that production
& marketing of the product are no more
profitable .
• The only alternative is to withdraw the product
from the market
• No product is permanent
Marketing strategies
of
product life cycle
 Marketing strategies under PLC
• Marketing strategy:
1. “ The schemes whereby a firm’s resources and
advantages are managed in order to surprise and
surpass competitor’s or to exploit opportunities”
2. According to Philip Kotler:-
• “marketing strategy is the marketing logic by which
the business unit expects to achieve its marketing
objectives. Marketing strategy consists of making
decision on the business’s marketing expenditures,
marketing mix, and marketing allocations in relation
to expected environmental and competitive
conditions”
 Features of marketing strategies
Aims at
• Achieving marketing objectives
• Form of action plan useful for facing market
competition or for exploiting marketing opportunities
• Continuous & dynamic process
• Covers all components of marketing mix
• Are different alternative solutions for achieving
marketing objectives
• Covers 2 aspects – objectives & 4 P’s
• Marketing strategies are for surpassing competitors
and for exploiting the available marketing
opportunities
 Aims of marketing strategies
• According to Philip Kotler “The aims of
marketing strategy may be
1. to expand the total market,
2. to defend the existing market
3. or to expand the existing market share”
Two broad aims of marketing strategies

1.To achieve well defined

marketing objectives
2.To cope up with the
market competition
 1.Product development stage
• Sales are zero and company’s cost increases
• The R&D develops the product concept into
physical product
• R&D hopes to design a product that will satisfy
& excite customers
• At this stage there is NO MARKETING
STRATEGY
 2. Introductory stage strategy

1. Rapid skimming strategy

2. Slow-skimming strategy
3. Rapid penetration strategy
4. Slow penetration strategy
 Rapid skimming strategy
• The feature of rapid skimming strategy are:-
1. The price fixed will be high
2. The promotional expenses will be heavy
• The promotional expenses are necessary as
the product is new and customers do not
know it’s merit / uses
• This facilitates quick marketing & continuous
growth in total sales
• The margin of profit will also be reasonable
 Rapid penetration strategy
• Price for the product is kept at low level
• BUT the promotional expenses incurred are
HEAVY
• Convenient when the size of the product is
large
• When the consumers are unaware of the
product
• When the customer of product are price
sensitive
 Slow penetration strategy
• Price at the initial period is low
• Promotional expenses are also limited
• Convenient when the market for the product is
very large
• When the buyers of the product are aware of
the product
• When there are substitute available for the
product
• When the consumers for the product are price
senstitive
 Slow skimming strategy
• The product price will be high
• BUT the firm will not spend substantial money
on the promotion of product
• Convenient when the size of market is small
or when customers are aware of NP
• Convenient when the consumers are willing to
pay high price & when substitute are NOT
available
 3. Growth stage strategy
1. Product improvement
2. Finding out new market
3. Modification in the distributive
channels
 Product improvement
• In order to attract new as well as existing
customers
• Modified version of the basic product model
are offered to customers
• Product improvement is possible by:-
1. Changing size/colour/smell of product
2. Addition of new features & usages
3. Introducing attractive packaging
4. Introducing new brand as per needs f the
consumers
 Finding out new market
• Firm will like to move to the new market along
with the existing one for sales promotion.
• Co’s can move to rural market in addition to
existing urban market
• This will supplement the sale in existing market
& will give the additional profit to the firm fm the
new market
• This strategy can be adopted if the product is
popular thru out country
Modification in the distributive channels
• Firm may open its retail shops in big cities for
direct sales to consumers
• New sole selling agent may be appointed for
promoting sales
• Sales promotion is possible by concentrating
attention on the distributive channels
 4. Maturity stage strategy
• The firm will have to find new market
• To study the strategy of competitor’s & adjust
the production & marketing activities to
counteract the same.
• Lowering of price, raising product features and
extended warranties (measure for promoting
the sales)
• Various combination of marketing mix are
required to be used.
 5. Declining stage strategy
1. Product innovation
2. Introduction of NP
3. Reduction in the production cost
4. Changes inn the marketing mix
5. Introduction of NP in the new market
6. Finding out the new uses of the product
modification