Product Life Cycle

2416 Words10 Pages
1. Introduction

It has been well established that Product Life Cycle (PLC) concept has a significant impact upon business strategy and corporate performance. Since the term was first used by Levitt (1965 ) in an Harvard Business Review article “Exploit the Product Life Cycle” the concept has been widely accepted and applied by marketing practitioners all over the world.
The product life cycle concept is one of the most quoted and most frequently taught elements of marketing theory. According to Mercer (1993: 269) the influence of the product life cycle can be seen in other theories, from new product development, positioning & differentiation and portfolio analysis.

Since its adoption by marketing, the product life cycle (PLC) has
…show more content…
Market introduction stage o high costs o sales volume low o low or no profits due to high developmental costs o no/little competition - competitive manufacturers watch for acceptance/segment growth losses o demand has to be created o customers have to be prompted to try the product
2. Growth stage o costs reduced due to economies of scale o sales volume increases significantly o profitability o public awareness o competition begins to increase with a few new players in establishing market o prices to maximize market share
3. Maturity stage o costs are high to maintain market share sales volume peaks o increase in competitive offerings o prices tend to drop due to the proliferation of competing products o brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered o sales are high but profits are low
4. Decline or Stability stage o costs become counter-optimal o sales volume decline or stabilize o prices, profitability diminish o profit becomes more a challenge of production/distribution efficiency than increased sales.(Kotler,1998;Kotler & Keller,2006)

More about Product Life Cycle

Get Access