PRODUCT LIFE CYCLE

The product passes through certain distinct stages during

its life time .It is the progression or course that a products
sales and a profits take over its life time .A new product is
introduced to consumers, it grows and when it losses
appeal,it declines and eventually is taken off the market
.Understand the typical life cycles pattern helps buissness
to manage profitable products and to know when it is time
to terminate unprofitable ones.
It is claimed that every product has a life period, it is
launched, it grows, and at some point, may die. A fair
comment is that - at least in the short term - not all
products or services die. Jeans may die, but clothes
probably will not. Legal services or medical services may
die, but depending on the social and political climate,
probably will not.Even though its validity is questionable, it
can offer a useful 'model' for managers to keep at the back
of their mind. Indeed, if their products are in the
introductory or growth phases, or in that of decline, it
perhaps should be at the front of their mind; for the
predominant features of these phases may be those
revolving around such life and death. Between these two
extremes, it is salutary for them to have that vision of
mortality in front of them.
However, the most important aspect of product life-cycles
is that, even under normal conditions, to all practical
intents and purposes they often do not exist (hence, there
needs to be more emphasis on model/reality mappings).
In most markets the majority of the major brands have
held their position for at least two decades. The dominant
product life-cycle, that of the brand leaders which almost
monopolize many markets, is therefore one of continuity.
 VTAGEV OF PRODUCT LIFE CYCLE
1)Development stage
2)Introduction stage
3)Growth stage
4)Maturity stage
5)Decline stage

1).DEVELOPMENT VTAGE
Product development begins when a company
generates a new product idea.There are no sales and
the firm prepares to introduce the product into the
market.As the product progresses through its life
cycle,changing in the marketing mix usually required in
order to adjust to the evolving challenges and
apportunities.The idea are generated through various
techniques like brainstorming , analysis of costomers
feedback , suggestions from employees , etc.
Objectives :The main objective in this stage is to
develop an idea for a new product .
This stage is characterized by:
= Development of new product and ideas.
= Investment in research and development
 = Test marketing may considered
= Pioneering advertising may be done to arouse
interest in prospects .

2). INTRODUCTION VTAGE

·hwn the product is introduced,sales will be low until
customers become aware of the product and its benefits
.some firms may announce their products before it is
introduced ,but such announcements also alerts
competitors and remove the elemt of surprise
.Advertising costs typically are high during this stage in
order to rapidly increase customer awareness of the
product and to target the early adoptors .During initial
distribution of the product .These higher costs coupled
with a low sales volume usually make the introduction
stage a period of negative profits .
During the introductory stage ,the primary goal is to
established a market and build primary demand for the
product class .the following are some of the marketing
mix implications of the introduction stage :

Objective: To create product awareness and to gain

trial .
This stage is characterised by :
= Low or moderate sales depending upon the type of
product
= Low or no profit . Company may also suffer loss .
= Low demand due to lack of brand awareness .
= Promotion : aimed at building brand awareness
.Samples or trial incentives may be directed towards
early adoptors promotion also intented to convince
potentials resellers to carry the products .
= Distribution : is selective and scaterred as the firms
commences implementations of the distribution plan .
= Price : is generally high,assuming a skim pricing
strategy for a high profit margin as the early adoptors
buy the product product and the firms seeks to recoup
development costs quickly.In some cases a
penetration pricing strategy is used and introductory
prices are set low to gain market share rapidly .

In this stage , the company must communicate the

produxcts features ,uses and advantages to potential
buyers through advertisement .Introduction stage is crucial
for some buissnes , which have limited resources
,technological knowledge and understanding of market .
È). GROWTH VTAGE
The Growth stage is period of rapid revenue growth
.Sales increase as more customers become aware of the
product and its benefit s and sdditional markets segments
are targeted.Once the product has been proven a success
and the customers begin asking for it ,sales will increase
further as more retailers become interested in carrying it
.the marketing team may be expand the distribution at this
point .·hen competitors enter the market ,often during
the later part of the growth stage ,there may be proce
competition and /or increased promotional costs in order
convince consumers that the firms product is better than
that of the competition.
Objective : To maximize the market share .
This stage is Characterised by :
= Product : New product features packing
options;improvements of product quality.
= Price : Maintained at a high level if demend is high ,or
reduced to capture additional customers.
= Disributions: Distribution becomes more intensive
.Trade discounts are minimal if resellers show a
strong interest in the product .
= Promotion : Increased advertising to build brand
preference.
 = Sales are to be increased
= Profits is increased
= Compititors enters in to the market
Profits ,increase in growth stage , due to economics of
large scale .The firm uses several strategies to sustain
rapid market growth as long as possible.It also explores
new market segments ,new distribution channels,and
increase promotion and distribution.

ß).MATURITY VTAGE
The maturity stage is the most profitable .·hile sales
continues to increase into this stage ,they do so at a
slower pace.Because brand awareness is strong
,advertising expenditures will be reduced .Compitions may
result in decreased market share and /or price .The
competing products may ne very similar at this point
,increasing the difficulty of differentiating the product.The
firm places effort into encouraging competitors customers
to switch ,increasing usage per customers ,and converting
non- users into customers .Sales promotions may be
offered to encourage retailers to give the product more
shelf space over competing products.
During the maturity stage ,The primary goal is to maintain
market share and extend the product life cycle .Marketing
mix decisions may include.
Objectives: To maximize the profits while defending
market share .
This stage is characterized by:
= Product :Modifications are made and features are
added in order to differentiate the product from
competing products that may have been introduced .
= Price:Possible price reductions channels and
incentives to resellers in order to avoid losing shelf
space.
= Distribution :New distribution channels and incentives
to resellers in order to avoid losing shelf space.
= Promotion : Emphases on differentiation and building
of brand loyalty .Incentives to get compititors
customers to switch.
= Profits starts declining during this stage
= Intense compition is faced
= Market shares starts declining
= Sales remain more or less stagnant
Strategies used in this stage is to build product awareness
through heavy advertising and sales promotion to induce
trials .In this stage ,The demand tends to reach a
saturation point ,The product sales growth tend to slow
down and profits starts decling .During this stage ,some
weakers conceptions drop put and the markets does have
well established competitors.
]).DECLINING VTAGE.
Eventually sales begin to decline as the market share
becomes saturated ,The product becomes technologically
obsolete, or becomes tastes changes .If the product has
developed brand loyalty ,the profitability may be
maintained longer .Unit costs may increase with the
declining production volumes and eventually no more
profits can be made.
Objectives: To reduce the expenditure.
During this stage the firm genereally has three options :
1. Maintain the product in hopes that compititors will exit
.Reduce costs and find new uses for the product.
2. Harvest it ,reducing marketing support and coasting
along until no more profits can be made
3. Discontinues the product when no more profits can be
made or there is a successor product .
So , the marketing mix can be modified as :
= Product ±The number of products in the product line
may be reduced .
= Price- Price 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- Expenditure are lower and aimed ar
reinforcing the brand image for continued products.
 Limitations of the product life cycles
The term ³life cycle´ implies a well defined life cycle as
observed in living organisms,but product do not have such
a predictable life and the specific life cycles curves
followed by different products vary substantially
.Consequently ,The life cycle concept is not well suited for
the forcasting.Consequently ,the life cycles concept is not
well siited for the forcasting of product sales .furthurmore,
critics have argued that the products life cylces may
become slf fulfilling .For examples ,if sales peak and then
decling ,managers may conclude that the products is in
the decline phase and therefore cut the advertising budget
,thus precipitating a further decline.
Nonetheless ,the product life cycles concept helps
marketing managers to plan alternate marketing strategies
to address the challenges that their products are likely to
face .It also is useful for monitoring sales results over time
and comparing them to those of products having a similar
life cycle.
 TRENDV IN PRODUCT LIFE CYCLE

1).Vhort...
One most observable trend is that product life cycles are
becoming shorter and shorter. This is given mostly by
ever-increasing competition (see Michael Porter's Five
Forces model for more on competition). ·hile a
manufacturer of pots and utensils faced competition only
from another manufacturer in the same city hundreds of
years ago, a pot manufacturer these days faces
competition from many companies on the other side of the
globe in addition to other local manufacturers. Everyone is
trying to come to the market with innovations.

2).Revitalization...
Many products in mature industries are revitalized by
product differentiation and market segmentation. It is not
uncommon that companies try to find new niches and
market segments when they see their product is about to
enter the Decline phase. Companies are becoming very
flexible in their ability to reassess product life cycle costs
and revenues.
È).Longer operating life...
Even though product life cycles shrink, the operating life of
many products is becoming longer. ·hile a 10 years old
car would be considered a wreck in 60's, today's cars are
relatively very durable and their life time is extending.
Companies have to take product operating life into
account and adjust their planning accordingly. Companies
are attempting to optimize product life cycle revenue and
profits through warranties and upgrades to existing
products.
 CONCLUSION
Product life cycle concept may be used as a
managerial tool. Marketing strategies must change
as the product goes through the life cycle. If
managers understand the cycle concept they are in
a better position to forecast future sales activities
and plan marketing strategies .

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