Product Life Cycle
- The Product Life Cycle is a sequence of a new product that progresses through different stages from Introduction to Growth, Maturity, and Decline.
- Management and marketing professionals use this concept to decide when it is appropriate to increase advertising, reduce prices, expand to new markets, or redesign packaging.
- Older products sooner or later become less popular, while in contrast, the demand for new or modern goods usually increases quickly after they have been launched. Since most organizations realize the product life cycle stages, and that the products they sell have a restricted lifespan, most of them put vigorously in new product development so as to ensure that their organizations keep on developing.
Stages of PLC
- Introduction Stage
- This phase of the cycle could be the most costly phase for an organization launching a new product.
- The organization looks to build product awareness and build up a business opportunity for the product. Marketing communications need to be done to educate potential consumers about the product.
- Growth Stage
- Under this stage, the firm seeks to build brand preference and increase market share. It sees strong growth in sales and profits.
- The firm can begin to profit by economies of scale. This makes it feasible for organizations to put more cash in promotional activities so as to maximize the potential of this growth stage.
- Maturity Stage
- During the maturity stage, the product is set up, and the focus of the firm is currently to keep up the cake they have made.
- Competition may appear with similar products in this stage. The essential target now is to shield a market share while boosting benefits.
- This is likely the most competitive time for most products and organizations to put carefully in any advertising they attempt. They likewise need to think about any product alterations or upgrades to the production procedure, which may give them an upper hand.
- Decline Stage
- The market for a product, after a certain amount of time, will begin to shrink, and this is referred to as the decline stage.
- This shrinkage could be because of the market getting immersed, or in light of the fact that the customers are switching to an alternate kind of product.
- While this decline might be inevitable, it might, in any case, be workable for organizations to make some benefit by switching to more affordable production strategies and less expensive markets or discontinue the product, or selling the remaining inventory to a firm that wishes to continue the product.
Let’s take an example of Product Life Cycle through The Consumer Electronics Sector
- Holographic Projection (Introduction stage)
- An example of the introduction stage.
- Recently introduced into the market, allowing consumers to turn any flat surface into a touchscreen interface.
- Huge investment in research and development and high prices that will only appeal to early adopters.
- Tablet PCs (Growth stage)
- Many tablet/PCs for consumers to choose nowadays.
- This product is passing through the Growth stage of the product life cycle.
- More competitors start to enter the market that really developed after the launch of Apple’s iPad.
- Mobile Phones (Maturity stage)
- Mobile Phones have been in the markets for several years.
- Hailing with upgraded advanced components, as well as varied features
- Appealing to different segments of the market will help to sustain this product as it goes through the Maturity stage.
- Typewriters (Decline Stage)
- Typewriters, and even electronic word processors, have exceptionally constrained usefulness.
- With consumers demanding significantly more from the electronic equipment they purchase, typewriters are a product that is going through the last phase of the product life cycle.
As the saying goes, “If we do not change our direction, we are likely to end up where we are headed”. Therefore, it is necessary for companies to conduct PLC Analysis so as to determine if their products are efficiently serving the markets they target and when they might need to shift focus or their direction.
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