2.  Product Life Cycle
 Strategies
INTRODUCTION STAGE
GROWTH STAGE
MATURITY STAGE
DECLINE STAGE

3.  Product life cycle is the course of a product’s sales
and profits over time.
 Product life cycle(PLC) deals with the life of a
product in the market with respect to business or
commercial costs and sales measures

4. When we say that a product has a life cycle we assert four
things:
 Products have a limited life.
 Products sales pass through distinct stages, each posing
different challenges, opportunities and problems to the
seller.
 Profits rise and fall at different stages of the product life
cycle.
 Products require different marketing, financial,
manufacturing, purchasing, and human resource strategies
in each life – cycle stages.

5. Product Life-Cycle
Sales and
Profits
Time
Product Introduction Growth Maturity Decline
Develop-
ment

6.  Type of product
 Level of competition
 Marketing support of the product
 Customer taste

7. Promotion
High Low
Rapid- Slow-
High skimming skimming
strategy strategy
Price
Rapid- Slow-
Low penetration penetration
strategy strategy

8.  The costs are very high
 low sales volumes to start
 Little or no competition
 Demand has to be created
 Customers have to be prompted to try the product

9.  The need for immediate profit is not a pressure.
 The product is promoted to create awareness
 Heavy expenditures to create trial for Sales
Promotion

11. Introduction Stage of the PLC
Low sales
Sales
Costs High cost per customer
Profits Negative
Marketing Objectives Create product awareness
and trial
Product Offer a basic product
Price Use cost-plus
Distribution Build selective distribution
Build product awareness among early
Advertising adopters and dealers

12.  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
• Sales Promotion – Reduce expenditures to take
advantage of consumer
demand

13.  Improves product quality and adds new features and
improved styling.
 Adds new models and flanker products(i.e., products of
different sizes, flavors, and so forth that protect the main
product).
 It enters new market segments
 It increases its distribution coverage and enters new
distribution channels.
 It shifts from product- awareness advertising to product-
preference advertising.
 It lowers price to attract the next layer of price – sensitive
buyers.

15. Growth Stage of the PLC
Sales Rapidly rising sales
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

16.  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

17. –Profits continue to grow and stay positive throughout
–Competition is most intense at this stage; many versions
and brands
–Strategies to prolong this stage:
• Modify the market
• Modify the product
• Modify the marketing mix

18. Three potentially useful ways to change the course
for a brand are market, product, and marketing
program modification.
Product modification
Trying to stimulate sales by modifying the
product’s characteristics through
1.Quality improvement
Eg: Aashirvaad, Annapurna,Nature fresh
2. Feature improvement
Eg: Pulsar 180 to Pulsar 220
3. Style improvement
Eg; New car models, New Coke

20. Maturity Stage of the PLC
Sales Peak sales
Costs Low cost per customer
Profits High profits
Marketing Objectives Maximize profit while defending
market share
Product Diversify brand and models
Price to match or best competitors
Price
Build more intensive distribution
Distribution
Advertising Stress brand differences and benefits

21.  costs become counter-optimal
 sales volume decline or stabilize
 prices, profitability diminish
 Sales of the new product drop quickly as the target market(s)
move on to other things
 Profits decline as competitive pressures force lower prices and
set promotional spending at a level that maintains the share

22. – Decisions about the product
• Maintain spending levels to fight it out for what is left
• Harvest by cutting spending and riding it out.
• Drop the product and move on to the next thing

24.  Eg.
5.25 Floppy disk

25. Decline Stage of the PLC
Sales Declining sales
Costs Low cost per customer
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

26. INTRODUCTION GROWTH MATURITY DECLINE
10-26

27.  Marketing management –Philip Kotler
Kevin Keller
Abraham Koshy
Mithileshwar Jha

28. THANK YOU !!!