Product life cycle

• Meaning
• The product life cycle is a concept that
describes the stages a product goes through
from its introduction to the market until its
eventual decline or discontinuation.
• It is a useful framework for businesses to
understand and manage the dynamics of a
product in the market. The product life cycle
concept is derived from the fact that a given
product’s volume and revenue follow a
typical pattern of four –phases cycle.
• If we plot a graph of sales volume versus
time for a product, generally, the PLC
represents a bell- shaped or s-shaped
 Introduction Stage
This is the stage when a new product is
introduced to the market.The introductory stage
is viewed as fairly risky and quite expensive
because large amounts of money is spent on
advertising and other tools of marketing
communications to create consumer awareness
in sufficiently large numbers, and encourage
trial.

E: g 3D Televisions: 3D may have been around

for a few decades, but only after considerable
investment from broadcasters and technology
 Introduction Stage of the
PLC
Sales
Sales Low
Low sales
sales
Costs
Costs High
High cost
cost per
per customer
customer
Profits
Profits Negative
Negative
Create
Create product
product awareness
awareness
Marketing
Marketing Objectives
Objectives and
and trial
trial
Product
Product Offer
Offer aa basic
basic product
product
Price
Price Use
Use cost-plus
cost-plus
Distribution
Distribution Build
Build selective
selective distribution
distribution
Build
Build product
product awareness
awareness
Advertising
Advertising among
among early
early adopters
adopters and
and
dealers
dealers
 Growth Stage

The growth stage of life cycle is characterized by a

sharp rise in sales. Only a small percentage of new
products introduced survive to reach the growth stage.

Tablet PCs: There are a growing number of tablet PCs

for consumers to choose from, as this product passes
through the Growth stage of the cycle and more
competitors start to come into a market that really
developed after the launch of Apple’s iPod. Another
 Growth stage Decision

Sales
Sales Rapidly
Rapidly rising
rising sales
sales
Costs
Costs Average
Average cost
cost per
per customer
customer
Profits
Profits Rising
Rising profits
profits
Marketing
Marketing Objectives
Objectives Maximize
Maximize market
market share
share
Product Offer
Offer product
product extensions,
extensions,
Product service,
service, warranty
warranty
Price
Price Price
Price to
to penetrate
penetrate market
market
Distribution
Distribution Build
Build intensive
intensive distribution
distribution
Advertising
Advertising Build
Build awareness
awareness and
and interest
interest
in
in the
the mass
mass market
market
 Maturity Stage
Most products after surviving competitive battles, winning
customer confidence and successful through growth phase enter
their maturity stage. The sales plateau, and this flattening of sales
usually lasts for some time because most products in the category
have reached their maturity stage, and there is stability in terms of
demand, technology, and competition.

E: g Laptops: Laptop computers have been around for a number

of years, but more advanced components, as well as diverse
features that appeal to different segments of the market, will help
to sustain this product as it passes through the Maturity stage.
 Maturity stage
Sales
Sales Peak
Peak sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits Maximize
Maximize profit
profit while
while defending
defending
market
market share
share
Marketing
Marketing Objectives
Objectives Diversify
Diversify brand
brand and
and models
models
specific
specific product
product strategies.
strategies.
Product
Product
Price Price
Price to
to match
match competitors
competitors
Price
Distribution
Distribution Build
Build more
more intensive
intensive distribution
distribution
Stress
Stress brand
brand differences
differences and
and
Advertising
Advertising benefits
benefits
 Decline Stage

Decline stage sets in when customer

preferences change due to the availability of
technologically superior products and
consumers’ shift in values, beliefs, and
tastes to products offering more value.
 Decline stage of PLC
Sales
Sales Declining
Declining sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits Declining
Declining profits
profits

Marketing
Marketing Objectives
Objectives
Reduce
Reduce expenditure
expenditure
Phase
Phase out
out weak
weak items
items
Product
Product
Cut
Cut price
price
Price
Price Go
Go selective:
selective: phase
phase out
out
Distribution
Distribution unprofitable
unprofitable outlets
outlets
Reduce
Reduce to
to level
level needed
needed to
to
Advertising retain
retain
Advertising hard-core
hard-core loyal
loyal customers
customers
Importance of Product life
cycle in Business
• 1. Strategic Planning:
– Helps in strategic planning by providing a
framework for anticipating and preparing for
changes in demand, competition, and market
conditions at each stage.

• 2. Resource Allocation:
– Guides efficient resource allocation by enabling
businesses to allocate resources appropriately
based on the specific needs and challenges of
each stage of the product life cycle
3. Product Development and
Innovation: Facilitates product
development and innovation by
encouraging companies to continuously
invest in research and development to
introduce new features, improve quality,
or create new products.

4. Marketing Strategy:
– Guides the development of effective
marketing strategies at each stage,
allowing businesses to tailor their
messaging, pricing, and distribution to
5. Risk Management:
– Aids in risk management by helping
businesses identify potential threats and
challenges, allowing them to proactively
address issues such as increased
competition, changing consumer
preferences, or technological
obsolescence.
6. Market Positioning:
– Assists in market positioning by allowing
businesses to position their products
appropriately based on the stage of the
life cycle, whether it's an introduction,
growth, maturity, or decline.
• 7. Revenue Forecasting:
– Provides a basis for revenue forecasting
by offering insights into the likely sales
patterns and revenue potential at
different stages of the product's life
cycle.
• 8. Product Portfolio Management:
– Supports effective product portfolio
management by helping businesses
diversify their product offerings,
introduce new products, and manage a
balanced portfolio to mitigate risks
associated with product life cycles.
• 9. Customer Relationships:
– Enhances customer relationships by
enabling businesses to understand and
respond to changing customer needs
throughout the life cycle, fostering long-
term customer loyalty.
• 10. Competitive Advantage:
– Contributes to gaining a competitive
advantage by allowing businesses to
differentiate their products, innovate,
and adapt more effectively than
competitors at each stage.
 Introduction- HUL

Hindustan Unilever Limited (HUL) is India's

largest FMCG company, touching the lives of
two out of three Indians with over 20 distinct
categories in home & personal care products
and food & beverages.
 INTRODUCTION-LUX
1960
LUX went
colored
1929
LUX
launched in
1925 India
LUX launched
in USA as
1916 Toilet soap
LUX launched
in USA as
Laundry soap
PRODUCT LIFE CYCLE
 Introduction (1929- 1950s)
Company Objectives Actions
Sales Low

Cost of manufacturing High

Profits Negative
Marketing Objective Create product awareness in
major cities
Product strategy Offer a basic product
Price strategy Higher than Lifebuoy
Distribution Created network in major
cities
Advertising strategy Awareness among early
adopters.
 Growth- (1950s- 1990s)
Company Objectives Actions
Sales Rising Sales

Cost of manufacturing Average cost reduction

Profits Positively increasing
Marketing Objective Maximise market share
Product strategy Offer variants
Price strategy To penetrate the market
Distribution Intensive network in the
entire country
Advertising strategy Awareness an interest in
mass market
 Maturity-(1990s to till date )
Company Objectives Actions
Sales Peak sales

Cost of manufacturing Low

Profits High
Marketing Objective Maximize profit while defending
market share
Product strategy Diversify brand
Price strategy To match the nearest competitor
Distribution More intensive focusing on rural
area
Advertising strategy Multiple brand ambassadors for
different variants.
Thank you