1. 1. PRODUCT LIFE CYCLE
2. 2. INTRODUCTION The stages through which the individual products develop over a period of time is known as product life cycle. The mostly appreciated product life cycle is of bell shape.
3. 3. Product life cycle The four stages are: 1. Introduction 2. Growth 3. Maturity 4. Decline along with an underlying Development stage In each stage.
4. 4. Introduction stage The stage , where the product is released into the market. Features: I. Sales growth tends to be slow II. Profits are negative or low III. Promotional expenditures are high IV. Prices tend to be high because costs are high
5. 5. Introduction stage(2.1) To be first can be rewarding , but risky and expensive. To come in later makes sense if the firm can bring superior technology , quality or brand strength. When the market is started by an incremental innovation, survival rates are high.
6. 6. Introduction stage(2.2)
7. 7. Introduction stage(3.1) (long-range product market expansion)
8. 8. Introduction stage(3.3)
9. 9. Growth stage Early adopters like the product, and additional customers start buying it. New competitors enter, attracted by the opportunities. They introduce new product features. Prices remain where they are or fall slightly depending on how fast demand increases. Sales rise much faster than the promotional expenditures.
10. 10. Growth stage(2) In order to have a rapid market growth , firms uses several strategies: Improvers product quality and adds new features and styling. Adds new models and flanker products Enters new market segments Increases the distribution coverage and enters new distribution channels Shifts from product-awareness advertising to product- preference advertising Lowers prices to attract the next layer of price sensitive buyer
11. 11. Growth stage(3)
12. 12. Maturity stage The rate of sales growth will slow and the product will enter a stage of relative maturity. Long lasting stage than all the other stages and poses big challenges to marketing management. Most of the products are in the maturity phase of the product life cycle.
13. 13. Maturity stage(2) The maturity phases is divided into 3 phases: Growth phase: The growth rate starts to decline and there are no new distribution channels to fill. Stable phase: sales flatten due to market saturation. Most potential consumers have tried the product, and the future sales are governed by population growth and replacement demand. Decaying maturity: the absolute level of sales starts to decline, and customers begin switching to other products.
14. 14. Maturity stage(3)
15. 15. Decline stage Sales decline for a number of reasons: Lack of technological advancement Shift in consumer tastes Increased domestic and foreign competition These can lead to: Overcapacity Increased price cutting Profit erosion
16. 16. Decline stage(2) Companies follows the below strategies to reduce the amount of losses: Withdraw from smaller segments and weaker trade channels. Cut their promotion budgets . Reduces the prices further. Failing to eliminate weak products delays the aggressive search for replacement products.
17. 17. Decline stage(3)
18. 18. Exceptions Not all products exhibit a bell-shaped PLC.The three common alternative patterns are as below: Growth-Slump maturity pattern Cycle-Recycle pattern Scalloped pattern
19. 19. Exceptions(2)
20. 20. Thank you!