PRESENTATIONPRODUCT LIFE CYCLE

PREPARED BY: ASHISH PARMAR (115) TEJASH LIMBACHIYA (102)

INTRODUCTION OF PLCLike a human being, all products have certain length of life during which they pass through certain identifiable stages. Through the conception of the product, during its developement and up to the market introduction, product remain in pre-initial stage. Its life begins with its market introduction, then goes through a period during which its market grows rapidly, eventualy, it reaches at maturity and then stands saturated. Afterwards its market declines and finaly its life come to an end. Stage of product life cycle: (1) Innovation or introduction stage (2) Growth (3) Maturity (4) Decline

MEANING & DEFINITIONAccording to Phillip Kotler, The product life cycle is an attempt to recognize distinct stage in the sales history of the product

According to Arch Patton, The life cycle of a product has many points of similarity with the human life cycle; the product is born, grows lustily, attains dynamic maturity then enters its declining year.

Assumption of PLC(1) Products have a limited life. (2) Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller. (3) Profit rise and fall at different stages of the PLC. (4) Product require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage of their life cycle.

PLC

(1) Introduction stage

A period of slow sales growth as the product is introduced in the market. Profits are nonexistent in the stage because of the heavy expenses incurred with product introduction.

INTRODUCTION STAGESummary of characteristics, Objectives, StrategiesSales Costs Profits Marketing objectives Product Price Distribution Promotion low High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus formula Build selective distribution Heavy to entice pdoduct trial

(2) Growth stage

A Period of rapid market acceptance and substaintial profit improvement.

GROWTH STAGE Summary of characteristics, Objectives, StrategiesSales Costs Profits Marketing objectives Product Price Distribution Promotion Rapidly rising Average cost per customer Rising Maximize market share Offer extension, service, warranty Penetration strategy Build intensive distribution Reduce to make advantage of demand

(3) maturity stage

A Period of a slowdown in sales growth becaus the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition.

MATURITY STAGE Summary of characteristics, Objectives, StrategiesSales Costs Profits Marketing objectives Product Price Distribution Promotion Peak Low cost per customer high Maximize profit while defending market share Diversify brand and models Match or best competitors Build more intensive distribution Increase to encourage brand switching

(4) Decline stage

The period when sales show a downward drift and profits erode.

DECLINE STAGE Summary of characteristics, Objectives, StrategiesSales Costs Profits Marketing objectives Product Price Distribution Promotion Declining Low cost per customer Declining Reduce expenditures and milk the brand Phase out weak items Cut price Selective: phase out unprofitable outlets Reduce to minumum leel

Characteristics of different stages of PLCcharacteristics Marketing objective Introduction Attract innovators and opinion leaders to new product Increasing None or small Negative Innovators One or two basic models Depends on product Informative Depend on product Growth Expand distribution & product line Rapidly Increasing some increasing Affluent mass market Expanding line Rising number of outlets Persuasive Greater range of prices Maturity Maintain differential advantage as long as possible stable Substaintial decreasing Mass market Full product line Gretest number of outlets Competitive Full line of prices Decline Cut back, revive, or terminate Decreasing Limited decreasing Laggards Best sellers Decreasing no of outlets Informative Selected prices

Industry sales Competition Industry profit Customers Product mix Distribution Promotion Pricing

Managing a product During Various stages of PLC(1) Introduction Phases (2) Growth Phases (3) Maturity Phases (4) Decline Phases

INTRODUCTION PHASE(1) Educating the customers and channels (2) Rapid skimming (Offring superior benefits gives companies the chance to charge a premium price and use high promotion) (3) Slow Skimming ( not using high promotion) (4) Rapid penetration (setting a competitive price) (5) Slow Penetration (6) Generating Trials through Effective Promotions and Branding

GROWTH PHASES:(1) Innovation to enable Greater Customer Acceptance (2) Mass Promotions (3) Changing Role of channels (4) Catering to Sub-Segments Through Variants (5) Geographical Expansion

MARKETING STRATEGIES FOR GROWH STAGE

Improve product quality and adds new features and improve styling.

Adds new models and flanker products (i.e., products of different sizes, flavors, and so forth that protect the main product)

It enters new market segments It increase its distribution coverage and enters new distribution channels.

It shifts from product-awarness advertising to product-preference advertising.

It lowers price to attract the next layer of price sensitive buyers.

MATURITY PHASES:(1) Price wars and Commoditization (2) Increasing sales Volumes through Innovative Methods (3) Value additions (4) focusing on Niche Segments (5) Product Rejuvenation

MARKETING STRATEGIS FOR MATURITY STAGEMARKET MODIFICATION Sales volume = no. Of brand users * usage rate per user. Expand the no. Of brand users Convert non users Enter new market segments Attaract competitors' customers Increase the usage rate among users Have consumers use more of the product on each occasion Have consumer use the product in new ways.

PRODUCT MODIFICATION Trying to stimulate sales by modifying the products characteristics through (1) QUALITY IMPROVEMENT (2) FEATURE IMPROVMENT (3) STYLE IMPROVEMENT

DECLINE PHASES:(1) Focus on Emerging Markets (2) Sales Promotions (3) Strategic Tie-Ups (4) Change the Segment (5) Divesting the Product

MARKETING STRATEGIS FOR DECLINE STAGE

Increase investment Resolve uncertainties stable investment Selective niches Harvesting Diversting To establish a system for identifying weak products. Some firms abandon declining markets earlier than others.

THREE SPECIAL CATEGORY OF PLC(1) Style (2) Fashion (3) Fad

ContinuedA Style is a basic and distinctive mode of expression appearing in a field of human endeavor. Styles appear in homes, clothing, art etc A Fashion is a currently accepted or popular style in a given field. Fashion pass through four stages: Distinctiveness, emulation, mass fashion, decline. Fads are fashions that comes quickly into public view, are adopted with great zeal, peak, early, and decline very fast.