Presentation on Product Life Cycle

Submitted By, Baldeep Kaur,

3/12/13

What is Product Life Cycle

Product life cycle includes the stages through

which a product or its category bypass. introduction to the obsolescence.

It is the product aging process right from its According to Prof. Philip Kotler, It is an attempt

to recognise distinct stages in the sales history of the product. of sales and profits trends for a product class or category over a period of time 3/12/13

According to Mr. Kollet, It is generalised model

Stages of Product life cycle

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Stages of Product Life Cycle

Introduction Stage:- It is characterised
by
Low and slow sales:- Basic reasons for this

are:-

-Delays in expansion of production capacity. -Consumer resistance. -Delay in making product available to customers due to lack of retail outlets.
Highest promotional expenses:- It may be

due to

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Cont
Highest product prices:-It is because of

-Lower output and sales observing fixed costs. -Higher margin to support higher doses of promotional expenses. -Very few competitors. -Technological problems might not have been matered fully.
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Growth Stage:- It is characterised by

Sales rise faster: Sales start climbing up at

faster because of:-Killing the consumer resistance to the product. -The distribution network-retail outlets is built to the needs. - Production facilities are streamlined to meet the fast moving sales.
Product improvements:

-As the Competitors may reduce the product 3/12/13 prices,it makes the originator to further improve

Cont..
Higher promotional expenses: It

includes

-Promotional strategy changes at this stage -Advertising moves towards brand identification. -Special offers,concession are given to dealers &stockists to push a particular brand.

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Maturity stage:- Feature of this stage are:

Sales increasing at decreasing rate:- It has

following extension strategies:-Development of new product. -Development of new uses.

-Development of new frequent use. -Development of style change.

Normal promotional expenses:- It includes:-

-The promotional expenses reach a normal ratio to sales. - Efforts are made to rationalise the existing
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Cont
Uniform and lower prices:- It includes

-The prices charged just to cover special cost in addition to the usual manufacturing expenses. - Prices charged by producers are quite lower. -Vitality of high prices fade. -Advantage of low margin.
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Decline stage :- Its features are:-

Rapid fall in sales:-

-People are interested in buying something new. -Decrease in sales which induces firms to close down.
Further fall in prices:-

-Rapid reduction in sales creates a fear. -There would be new kind of competitors to have enlarged shares in such a decline stage.
No promotional expenses:3/12/13

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