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The Product Life Cycle

• Introduction Stage
– Firm works to stimulate demand for the new
market entry

– Promotional campaigns stress features

– Additional promotions to intermediaries

attempt to induce them to carry the product

– Although prices are typically high, financial

losses are common due to heavy promotional
and research-and-development costs
• Growth Stage
– Sales volume rises rapidly

– Firm usually begins to realize substantial profits

– Success attracts competitors

– Firm may need to make improvements to the


– Additional spending on promotion and

distribution may be necessary
• Maturity Stage
– Industry sales continue to grow, but eventually
reach a plateau

– Many competitors have entered the market,

and profits began to decline

– Differences between competing products


– Available supplies exceed industry demand for

the first time

– Competition intensifies and heavy promotional
outlays are common
• Decline Stage
– Innovations or shifts in consumer preferences
cause an absolute decline in industry sales

– Industry profits fall -- sometimes become


– Firms cut prices in a bid for the dwindling


– Manufacturers gradually drop the declining

items from their product lines
Product Life Cycle
Characteristics Introduction Growth
Marketing objective Attract innovators and Expand distribution and
opinion leader to new product line
Industry sales Increasing Rapidly increasing
Competition None or small Some
Industry profits Negative Increasing
Customers Innovators Affluent mass market
Product mix One or two basic Expanding line
Distribution Depends on product Rising number of
Pricing Depends on product Greater range of prices
Promotion Informative Persuasive
Product Life Cycle
Characteristics Maturity Decline
Marketing objective Maintain differential (a) cut back,
advantage as long as (b) revive,
possible (C) terminate
Industry sales Stable Decreasing
Competition Substantial Limited
Industry profits Decreasing Decreasing
Customers Mass market Laggards
Product mix Full product line Best-sellers
Distribution Greatest number of Decreasing number of
outlets outlets
Pricing Full line of prices Selected prices
Promotion Competitive Informative
Extending the Product Life Cycle
• Marketers usually try to expand each stage of
the life cycle for their products as long as
• Product life cycles can stretch indefinitely as a
result of decisions designed to:
– Increase the frequency of use by current
– Increase the number of users for the product
– Find new uses
– Change package sizes, labels, or product quality
Product Deletion Decisions

• Product lines must sometimes be pruned

and marginal products eliminated

• This decision is typically faced during the

late maturity and early declined stages of
the product life cycle

• An unprofitable item may be continued in

order to provide a complete line for
Limitations of PLC

• Nariman Dhalla & Sonia Yuspeh – 1976

• Examined over 100 product categories like food, health,

personal care

• Listerene,Marlboro,Colgate,Anacin,Budweiser

Limitations of PLC

• Difficult to gauge accurately where a product is on its PLC

graph. A rise in sales per se is not necessarily evidence of
growth. A fall in sales per se does not typify decline

• Some products do not experience a decline. Coca Cola and

Pepsi are examples that have existed for many decades, but
are still popular products all over the world.

• Different products would possess different PLC "shapes".

A fad product would hold a steep sloped growth stage, a
short maturity stage, and a steep sloped decline stage.