Product Life Cycle Stages Essay

Words: 5636
Pages: 23

A product's life cycle (PLC) can be divided into several stages characterized by the revenue generated by the product. The life cycle concept may apply to a brand or to a category of product. Its duration may be as short as a few months for a fad item or a century or more for product categories such as the gasoline-powered automobile. Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. As the product progresses through its life cycle, changes in the marketing mix usually are required in order to adjust to the evolving challenges and opportunities.
The four stages of product life cycle are:
1. Introduction stage
2. Growth stage
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• Discontinue the product when no more profit can be made or there is a successor product.
The marketing mix may be modified as follows:
• Product - The number of products in the product line may be reduced. Rejuvenate surviving products to make them look new again.
• Price - Prices may be lowered to liquidate inventory of discontinued products. Prices may be maintained for continued products serving a niche market.
• Distribution - Distribution becomes more selective. Channels that no longer are profitable are phased out.
• Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued products. LIMITATIONS OF THE PRODUCT LIFE CYCLE CONCEPT
The term "life cycle" implies a well-defined life cycle as observed in living organisms, but products do not have such a predictable life and the specific life cycle curves followed by different products vary substantially. Consequently, the life cycle concept is not well-suited for the forecasting of product sales. Furthermore, critics have argued that the product life cycle may become self-fulfilling. For example, if sales peak and then decline, managers may conclude that the product is in the decline phase and therefore cut the advertising budget, thus precipitating a further decline.
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