1. Product life cycle

2. Product Life Cycle (PLC):The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).
Each product may have a different life cycle
PLC determines revenue earned
Contributes to strategic marketing planning
May help the firm to identify when a product needs support, redesign, reinvigorating, withdrawal, etc.
May help in new product development planning
May help in forecasting and managing cash flow

3. Product Life Cycle: Implications for Business Strategy
Stage of the product life cycle
Sales revenue or profit
Introduction
Growth
Maturity
Decline
Total industry sales revenue
Total industry profit + –

4. Introduction Stage of the PLC
Product Life-Cycle Strategies
This CTR relates to the material on pp. 289 and 293.
Introduction Stage of the PLC
Sales
Low sales
Product Life Cycle Strategies
Costs
High cost per customer
Introduction. In this stage marketers spend heavily on promotions to inform the target market about the new product's benefits. Low or negative profits may encourage the company to price the product high to help offset expenses. companies can concentrate on skimming strategies to generate high profits now or on penetration strategies to build market share and dominant the market for larger profits once the market stabilizes.
Profits
Negative
Marketing Objectives
Create product awareness
and trial
Product
Offer a basic product
Price
Use cost-plus
Distribution
Build selective distribution
Advertising
Build product awareness among early adopters and dealers

5. Growth Stage of the PLC Sales Costs Profits Product Price Distribution
Product Life-Cycle Strategies
This CTR relates to the material on pp and 293.
Growth Stage of the PLC
Sales
Rapidly rising sales
Product Life-Cycle Strategies
Growth. In this stage the company experiences both increasing sales and competition. Promotion costs are spread over larger volume and strategic decisions focus on growth strategies. Strategies include adding new features, improving quality, increasing distribution, and entering new market segments.
Costs
Average cost per customer
Profits
Rising profits
Marketing Objectives
Maximize market share
Product
Offer product extensions, service, warranty
Price
Price to penetrate market
Distribution
Build intensive distribution
Advertising
Build awareness and interest in the mass market

6. Maturity Stage of the PLC
Product Life-Cycle Strategies
This CTR relates to the material on pp and 293.
Maturity Stage of the PLC
Sales
Peak sales
Costs
Low cost per customer
Product Life Cycle Strategies
Maturity. In this stage the company must manage slower growth over a longer period of time. Strategic decisions made in the growth stage may limit choices now. Marketing managers must proactively seek advantage by either market modification to increase consumption, product modification to attract new users (quality, feature, and style improvements), or marketing mix modification in an attempt to improve competitive position.
Profits
High profits
Marketing Objectives
Maximize profit while defending
market share
Product
Diversify brand and models
Price
Price to match or best competitors
Distribution
Build more intensive distribution
Advertising
Stress brand differences and benefits

7. Decline Stage of the PLC
Product Life-Cycle Strategies
This CTR relates to the material on pp
Decline Stage of the PLC
Sales
Declining sales
Costs
Low cost per customer
Product Life Cycle Strategies
Decline. In this stage the costs of managing the product may eventually exceed profits. Rate of decline is a major factor in setting strategy. Management may maintain the brand as competitors drop out, harvest the brand by reducing costs of support for short term profit increases, or drop the product (divest) altogether.
Profits
Declining profits
Marketing Objectives
Reduce expenditure and milk the brand
Product
Phase out weak items
Price
Cut price
Distribution
Go selective: phase out unprofitable outlets
Advertising
Reduce to level needed to retain
hard-core loyal customers

8. PLC- Important Observations
Individual brands may not follow this pattern
Sometimes a product may crash and not get to the maturity stage
Product Life Cycle - length of time at each stage  - varies
depends on the products
can be a few months in each stage
or it can be years
Generally speaking, due to the 
Competitive Environment
Technological Environment
The PLC is getting shorter

9. Extending Product Life Cycle
Market Modification:
Increase Frequency of use by Present Customers
Add New Users
Find New Users
Product Modification:
Change Product Quality or Packaging

10. Example: New Flavor of Pepsi
Stage 1: Market Introduction
Pepsi bottles the new flavored product and places it on the market for consumers.
Pepsi also spends a lot of money advertising the new flavor creating awareness.
Stage 2: Market Growth
Customers like the flavor and begin to make routine purchases.
Coke introduces their competing flavor.

11. Stage 3: Market Maturity
More competitors enter the market taking some of Pepsi’s profits.
Stage 4: Sales Decline
Customers have moved on to the next new flavor.
Some loyal fans stay behind.

12. THANK YOU -PHARMA STREET