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PRODUCT LIFE CYCLE

PRESENTED BY :ANKI T GUPTA0 5 - M B A - 1 3

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WHAT IS A PRODUCT?

A PRODUCT is anything that can be offered to a market usu allyto s a t is fy a want or need

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PRODUCT LIFE CYCLE

Every PRODUCT has a life cycle and asserts four thingsabout a PRODUCT:

PRODUCTS have a limited lifePRODUCT sales pass through different stages each posingdifferent challenges, opportunities n problems to the sellerProfits rise n fall at different stagesPRODUCTS require different marketing, financial,purchasing strategies at each stage

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STAGES IN PRODUCT LIFE CYCLE

Introduction Stage

Growth StageMaturity StageDecline Stage

PLC shows the stages that products go throughfrom Introduction to withdrawal from the market.

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INTRODUCTION STAGE

No Competition

Low Sales Volume

Negligible ProfitsCreation of Demand

High Cost

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GROWTH STAGE

Increase in Demand

Increase in Market Share

Sales Volume IncreaseProfit Rise

Entry of Competitors

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MATURITY STAGE

Avoid Shrinkage of Sales Volume &Usually lasts longer than previousstages

Divided into three phases:1. Growth-sales growth rate starts

to decline2. Stable-sales flatten becoz of

market saturation3. Decaying maturity-the absolute

level of sales begin to declineand customers start switchingto other products

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EXAMPLE: MAGGI NOODLES

Stage 1: IntroductionLaunched in India in 1982 keeping in mind workingwomen and children.Pioneer in instant noodle market.

Low PriceBAS 2 MINUTE

Stage 2: Growth

Sales Incresed50% Market ShareNo 1 BrandGOOD TO EAT FAST TO COOK

Entry of aCompetitor

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REINTRODUCTION OF MAGGI NOODLE

Reintroduced in 1999

Increased Distribution

Focus on new segments of Society

New & Interesting TV Commercial

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MARKETING STRATEGY-INTRODUCTIONPHASE

1. Rapid-skimming strategy high price/highpromotion).

2. Slow-skimming strategy high price/lowpromotion).

3. Rapid-penetration strategy low price/high

promotion).4. Slow-penetration strategy low price/low

promotion).

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MARKETING STRATEGY-GROWTHPHASE 1. Improve service quality and add new service

features and elements2. Enter new market segments3. Use new channels of distribution4. Lower prices to attract more price-sensitive

customers

5. Shift from product awareness advertising toproduct-preference advertising

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MARKETING STRATEGY-MATURITYPHASE

1. Market-modification strategy Increase frequency use by current consumers

Look for new target market

2. Product-modification strategy Quality improvement Feature improvement

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MARKETING STRATEGY-DECLINE

PHASE 1. Reduce cost2. Reduce price

3. Phase out weak items4. Include special offers

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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 iscurrently placed, a product may stay for long or short period ina particular stage and may or may not pass through all thestages of PLC

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INTRODUCTION GROWTH MATURITY DECLINE

Third generationmobile phones

Portable DVDPlayers

PersonalComputers Typewriters

E-conferencing

Email

Faxes Handwritten

letters All-in-one racingskin-suits

Breathablesynthetic fabrics Cotton t-shirts

Shell Suits

iris-based personalidentity cards Smart cards

Credit cards Chequebooks

EXAMPLES:

Product life cycle.

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