PRODUCT LIFE CYCLE

PRESENTED BY:
ANKI T GUPTA
05- MBA- 13
WHAT IS A PRODUCT?
A PRODUCT is anything that can be offered to a market usually
to satisfy a want or need
PRODUCT LIFE CYCLE

Every PRODUCT has a life cycle and asserts four things
about a PRODUCT:
PRODUCTS have a limited life
PRODUCT sales pass through different stages each posing
different challenges, opportunities n problems to the seller
Profits rise n fall at different stages
PRODUCTS require different marketing, financial,
purchasing strategies at each stage


STAGES IN PRODUCT LIFE CYCLE

Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
PLC shows the stages that products go through
from Introduction to withdrawal from the market.

INTRODUCTION STAGE
No Competition
Low Sales Volume
Negligible Profits
Creation of Demand
High Cost

GROWTH STAGE
Increase in Demand
Increase in Market Share
Sales Volume Increase
Profit Rise
Entry of Competitors
MATURITY STAGE

Avoid Shrinkage of Sales Volume &
Usually lasts longer than previous
stages
Divided into three phases:
1. Growth-sales growth rate starts
to decline
2. Stable-sales flatten becoz of
market saturation
3. Decaying maturity-the absolute
level of sales begin to decline
and customers start switching
to other products

DECLINE STAGE
Demand Shrinks
New Replaces Old
Sales & Profits Diminishes
Link up with New Products
Discontinue Sales and profits decline
Some companies withdraw their products from market
Those remaining reduce number of products
Focuses on cost reduction

EXAMPLE: MAGGI NOODLES
Stage 1: Introduction
Launched in India in 1982 keeping in mind working
women and children.
Pioneer in instant noodle market.
Low Price
BAS 2 MINUTE

Stage 2: Growth
Sales Incresed
50% Market Share
No 1 Brand
GOOD TO EAT FAST TO COOK

Entry of a
Competitor

Stage 3: Maturity
Introduced new Variety
Price Rs 5 Onwards
Big Time Promotional Offers
Slow Down In Sales
Market Saturation

Stage 4: Decline
Big Time Downfall in Sales
Formulation Changed
New products launched
Failure

REINTRODUCTION OF MAGGI NOODLE
Reintroduced in 1999
Increased Distribution
Focus on new segments of Society
New & Interesting TV Commercial
MARKETING STRATEGY-INTRODUCTION
PHASE

1. Rapid-skimming strategy (high price/high
promotion).
2. Slow-skimming strategy (high price/low
promotion).
3. Rapid-penetration strategy (low price/high
promotion).
4. Slow-penetration strategy (low price/low
promotion).

MARKETING STRATEGY-GROWTH
PHASE
1. Improve service quality and add new service
features and elements
2. Enter new market segments
3. Use new channels of distribution
4. Lower prices to attract more price-sensitive
customers
5. Shift from product awareness advertising to
product-preference advertising

MARKETING STRATEGY-MATURITY
PHASE

1. Market-modification strategy
Increase frequency use by current consumers
Look for new target market

2. Product-modification strategy
Quality improvement
Feature improvement


MARKETING STRATEGY-DECLINE
PHASE

1. Reduce cost
2. Reduce price
3. Phase out weak items
4. Include special offers
PROBLEMS OF PLC ?
Many products do not conform to the traditional product life
cycle pattern. They fluctuate with economy

It is difficult to find the stage of PLC in which the product is
currently placed, a product may stay for long or short period in
a particular stage and may or may not pass through all the
stages of PLC
INTRODUCTION GROWTH MATURITY DECLINE
Third generation
mobile phones
Portable DVD
Players
Personal
Computers
Typewriters
E-conferencing Email Faxes
Handwritten
letters
All-in-one racing
skin-suits
Breathable
synthetic fabrics
Cotton t-shirts Shell Suits
iris-based personal
identity cards
Smart cards Credit cards
Cheque
books
EXAMPLES:
Product life cycle.