life cycle of a product

1. PRODUCT LIFE CYCLE

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. 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. 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. 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. Introduction stage(2.2)

7. Introduction stage(3.1)
(long-range product market
expansion)

8. Introduction stage(3.3)

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. 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. Growth stage(3)

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. 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. Maturity stage(3)

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. 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. Decline stage(3)

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. Exceptions(2)

20. Thank you!