Product LIfe Cycle
Product life-cycle (PLC) Like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline, and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools, and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. To say that a product has a life cycle is to assert three things:
- Products have a limited life, and thus every product has a life cycle.
- Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller.
- Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.
The four main stages of a product's life cycle and the accompanying characteristics are:
|
Stage
|
Characteristics
|
|
1. Market introduction stage
|
1.
costs
are very high
2.
slow
sales volumes to start
3.
little
or no competition
4.
demand
has to be created
5.
customers
have to be prompted to try the product
6.
makes
no money at this stage
|
|
2. Growth
stage
|
1.
costs
reduced due to economies of scale
2.
sales
volume increases significantly
3.
profitability
begins to rise
4.
public
awareness increases
5.
competition
begins to increase with a few new players in establishing market
6.
increased
competition leads to price decreases
|
|
3. Maturity
stage
|
1.
costs
are lowered as a result of production volumes increasing and experience curve
effects
2.
sales
volume peaks and market saturation is reached
3.
increase
in competitors entering the market
4.
prices
tend to drop due to the proliferation of competing products
5.
brand
differentiation and feature diversification is emphasized to maintain or
increase market share
6.
Industrial
profits go down
|
|
4. Saturation
and decline stage
|
1.
costs
become counter-optimal
2.
sales
volume decline
3.
prices,
profitability diminish
4.
profit
becomes more a challenge of production/distribution efficiency than increased
sales
|
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