PPT on Product Life Cycle by ANUP KUMAR OJHA
Transcript of PPT on Product Life Cycle by ANUP KUMAR OJHA
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Introduction
Product life-cycle management : is the
succession of strategies used by business
management as a product goes through itslife-cycle.
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Product life-cycle (PLC)
Example: Like human beings, products alsohave an arc. From birth to death, humanbeings pass through various stages e.g. birth,growth, maturity, decline and death.
A similar life-cycle is seen in the case ofproducts.
Product life cycle (PLC) has to do with the lifeof a product in the market with respect toBusiness/commercial costs and salesmeasures.
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Different stages of PLC
introduction stage:
I. costs are very high
II. slow sales volumes to startIII. little or no competition
IV. demand has to be created
V. customers have to be prompted to try theproduct
VI. makes no money at this stage
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Growth stage
I. costs reduced due to economies of scale
II. sales volume increases significantly
III. profitability begins to riseIV. public awareness increases
V. competition begins to increase with a few
new players in
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Maturity stage
I. costs are lowered as a result of production volumesincreasing and experience curve effects
II. sales volume peaks and market saturation is
reachedIII. increase in competitors entering the market
IV. prices tend to drop due to the proliferation ofcompeting products
V. brand differentiation and feature diversification isemphasized to maintain or increase market share
VI. Industrial profits go down
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Saturation and decline stage
I. costs become counter-optimal
II. sales volume decline
III. prices, profitability diminishIV. profit becomes more a challenge of
production/distribution efficiency than
increased sales
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Lessons of the PLC
It is claimed that every product has a life
period, it is launched, it grows, and at some
point, may die. A fair comment is that atleast in the short term not all products or
services die. Jeans may die, but clothes
probably will not. Legal services or medical
services may die, but depending on the socialand political climate, probably will not.
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Limitations
The PLC model offers some degree of usefulnessto marketing managers, in that it is based onfactual assumptions. Nevertheless, it is difficult
for marketing management to gauge accuratelywhere a product is on its PLC graph. A rise insales per se is not necessarily evidence of growth.A fall in sales per se does not typify decline.Furthermore, some products do not (or to date,
at the least, have not) experience a decline. CocaCola and Pepsi are examples of two productsthat have existed for many decades, but are stillpopular products all over the world.
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Any Questions
?
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THANK YOU
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