(PLC)

A new product progresses through a sequence of stages from a growth to development, maturity and decline. This sequence is known as Product Life Cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and marketing mix.

Product Life Cycle

Introduction StageIn the introduction stage, the firm seeks to

build product awareness and develop a market for the product.

o Product branding and quality level is establish and intellectual property protection such as patents and trade marks are obtained.

o Pricing may be low, to build market share rapidly, or high skim pricing to recover

development cost.o Distribution is selective until consumer

show acceptance of product.o Promotion is aimed at innovation. It

includes building up of product awareness and to educate potential consumers about the product.

Growth StageIn the growth stage, the firm seeks to build

brand preference and increase market show.o Product’s quality is maintained and

additional features and support services may be added.

o Pricing is maintained as the firm enjoys increasing demand in the little competition.

o Distribution channels are added as demand increases and customers accept the product.

o Promotion is aimed at a potential audience.

Maturity StageIn this stage, a strong growth in sales

diminishes. Competition will appear with similar products. The primary objective at this point is to defend market share while maximizing profit.

o Product features may be enhanced to differentiate the product from that of competitors.

o Pricing may be lower because of the new competition.

o Distribution became more intensive and incentives may be offered to encourage preference over competition products.

o Promotion emphasize product differentiation.

Decline StageAs sales decline the firm has several options:o Maintain the product, possibly rejuvenating

by adding new features and finding new issues.

o Harvest the product: reduce cost and continue to offer, possibly to the loyal segment of the audience.

o Discontinue the product, liquidation remaining inventory or selling it to amother

firm that is willing to continue the product.