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Lecture No. 07: Product Life Cycle (PLC) Meaning and Stages in PLC Characteristics of PLC

The document discusses the product life cycle (PLC), which describes the stages a product goes through from introduction to market to decline. The four stages are: 1) Introduction, characterized by low sales and profits; 2) Growth, where sales and profits increase rapidly; 3) Maturity, where the market becomes saturated and competition increases, slowing growth; and 4) Decline, where sales and profits fall sharply until production is suspended. Each stage has defining characteristics around sales, prices, competition and promotional expenses.

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93 views11 pages

Lecture No. 07: Product Life Cycle (PLC) Meaning and Stages in PLC Characteristics of PLC

The document discusses the product life cycle (PLC), which describes the stages a product goes through from introduction to market to decline. The four stages are: 1) Introduction, characterized by low sales and profits; 2) Growth, where sales and profits increase rapidly; 3) Maturity, where the market becomes saturated and competition increases, slowing growth; and 4) Decline, where sales and profits fall sharply until production is suspended. Each stage has defining characteristics around sales, prices, competition and promotional expenses.

Uploaded by

Atharva Dumbre
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

Lecture No.

07

Product life cycle (PLC)


Meaning and stages in PLC
Characteristics of PLC
Definition:-
The product life cycle is the process a
product goes through from when it is first
introduced into the market until it declines or is
removed from the market.
A product passes through certain
distinct stages during its life is called product life
cycle.

While some products may stay in a prolonged


maturity state, all products eventually phase out of
the market due to several factors including
saturation, increased competition, decreased
demand and dropping sales.
The product life cycle has four stages: –
1) Introduction 2) Growth
3) Maturity 4) Decline.
1. Introduction

• It is the first stage, wherein the product is


launched in the market with full scale
production & marketing programme.
• The product is a new one. It means “ a product
that opens up an entirely new market,
replaces an existing product or significantly
broadens the market for an existing
product.”
• In this stage sales grow at a very lower
rate because it is not an effective
Characteristics of Introduction Stage

• Low & slow sales.


• High product price.
• Heavy promotional expenses.
• Lack of knowledge.
• Low profits.
.
2. Growth

• Once the market has accepted the product, sales


begin to rise
.
& product enter its second stage.
• The product achieves considerable & widespread
approval in the market. The sales & profits increases
at an accelerated rate.
• In this effective distribution, advertising & sales
promotion are considered as the key factors.
.
Characteristics of Growth stage

• Rapid increase in sales.


.
• Product improvements.
• Increase in competition.
• Increase in profits.
• Reduction in price.
• Strengthening the distribution channel.
3. Maturity

• Market becomes saturated because the


household demand is satisfied &
distribution channels are full.
• The product has to face keen competition
which brings pressure on prices.
• Though the sales of the product rises but
at a lower rate. Profit margin however
decline due to keen competition.
.

Characteristics of Maturity stage

• Sales increases
.
at decreasing rate.
• Normal promotional expenses.
• Uniform & lower prices.
• Product modifications.
• Dealer’s support.
• Profit margin decreases
4. Decline

• This is the finial stage, sooner or later


actual sales begin to fall under the impact of
new product competition & changing
consumer behavior.
• The sales & profits fall down sharply & the
promotional expenditure has to be cut
down drastically.
.

Characteristics of Decline stage

• Rapid decrease in sales.


.

• Further decrease in prices


• No promotional expenses.
• Suspension of production work.

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