Http:// Copyright 2006 – Biz/ed Product Life Cycles

http://www.bized.co.uk

Product Life Cycles

Lesson ObjectivesBy the end of this lesson:-• All – of you will be able to explain and identify the PLC.

• Most – of you will be able to explain the different stages of the PLC.

• Some – of you will be able to identify accurately which products are in which section of the PLC.

Product Life Cycles

Development Introduction Growth Maturity Saturation Decline

Product Life Cycles

• Product Life Cycle – shows the stages that products go through from development to withdrawal from the market

• Product Portfolio – the range of products a company has in development or available for consumers at any one time

• Managing product portfolio is important for cash flow

Product Life Cycles

• Product Life Cycle (PLC):– Each product may have a different life cycle– PLC determines revenue earned– 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

Product Life Cycles

• The Stages of the Product Life Cycle:– Development– Introduction/Launch– Growth– Maturity– Saturation– Decline– Withdrawal

Product Life Cycles

• Introduction/Launch:– Advertising and promotion campaigns– Target campaign at specific

audience? – Monitor initial sales– Maximise publicity– High cost/low sales– Length of time – type of product

Product Life Cycles

• Growth:– Increased consumer awareness– Sales rise– Revenues increase– Costs - fixed costs/variable costs,

profits may be made– Monitor market – competitors

reaction?

Product Life Cycles

• Maturity:– Sales reach peak– Cost of supporting the product declines– Ratio of revenue to cost high– Sales growth likely to be low– Market share may be high– Competition likely to be greater– Monitor market – changes/amendments/new

strategies?

Product Life Cycles

• Decline and Withdrawal:– Product outlives/outgrows its

usefulness/value– Fashions change– Technology changes– Sales decline– Cost of supporting starts to rise too far– Decision to withdraw may be dependent on

availability of new products and whether fashions/trends will come around again?

Product Life Cycles

Development Introduction Growth Maturity Saturation Decline

Product Life CyclesSales/Profits

PLC and Profits

Losses

Break Even

Profits

Http:// Copyright 2006 – Biz/ed Product Life Cycles

Documents

Http:// Copyright 2005 – Biz/ed Human Resource Management

with-Biz SAGA 5 18 Nakashima Emi httP:// ... · with-Biz SAGA 5 18 Nakashima Emi httP:// Saga Prefectural Regional Industry Support Center Saga Prefectural Regional Industry Support

Http:// Copyright 2006 – Biz/ed The Labour Market The Supply and Demand for Labour

Http:// Copyright 2005 – Biz/ed Aggregate Demand and Supply

Http:// Copyright 2006 – Biz/ed PRICING

Http:// Copyright 2007 – Biz/ed Unemployment, NAIRU and the Phillips Curve

Http:// Copyright 2006 – Biz/ed Market Structure

Http:// Copyright 2006 – Biz/ed Oligopoly

Http:// Copyright 2006 – Biz/ed International Economics Trade, The Balance of Payments and Exchange Rates

Http:// Copyright 2006 – Biz/ed Pricing Strategies

Http:// Copyright 2006 – Biz/ed Market Research

Http:// Copyright 2007 – Biz/ed Meaning of Leadership Process of influencing people, understanding their needs and aspirations, setting

Http:// Copyright 2007 – Biz/ed Measures of Economic Performance

Http:// Copyright 2005 – Biz/ed Pricing Strategies

Http:// Copyright 2004 – Biz/ed Pricing Strategies

Http:// Copyright 2005 – Biz/ed Market Structure

Http:// Copyright 2006 – Biz/ed Business Strategy

Http:// Copyright 2005 – Biz/ed Indicators of Economic Development

Http:// Copyright 2007 – Biz/ed Public Sector Spending

Http:// Copyright 2005 – Biz/ed Product Life Cycles and the Boston Matrix