Product Life Cycle

The Product Life Cycle (PLC) is used to map the lifespan of a product. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage. The following graph illustrates the four stages of the PLC:

There is no set time period for the PLC and the length of each stage may vary. One product's entire life cycle could be over in a few months. Another product could last for years. Also, the Introduction stage may last much longer than the Growth stage and vice versa.

The Four Stages of the Product Life Cycle

1. Introduction:  The Introduction stage is probably the most important stage in the PLC. In fact, most products that fail do so in the
                        Introduction stage. This is the stage in which the product is initially promoted. Public awareness is very important to the
                        success of a product. If people don't know about the product they won't go out and buy it.

                        There are two different strategies you can use to introduce your product to consumers. You can use either a penetration
                        strategy or a skimming strategy. If a penetration strategy is used then prices are set very high initially and then gradually
                        lowered over time. This is a good stategy to use if there are few competitors for your product. Profits are high with this
                        strategy but there is also a great deal of risk. If people don't want to pay high prices you may lose out. The second
                        pricing strategy is a skimming strategy. In this case you set your prices very low at the beginning and then gradually
                        increase them. This is a good strategy to use if there are alot of competitors who control a large portion of the market.
                        Profits are not a concern under this strategy. The most important thing is to get you product known and worry about
                        making money at a later time.

2. Growth:        If you are lucky enough to get your product out of the Introduction stage you then enter this stage. The Growth stage is
                        where your product starts to grow. In this stage a very large amount of money is spent on advertising. You want to
                        concentrate of telling the consumer how much better your product is than your competitors' products.

                        There are several ways to advertise your product. You can use TV and radio commercials, magazine and newspaper
                        ads, or you could get lucky and customers who have bought your product will give good word-of-mouth to their
                        friends/family.

                        If you are successful with your advertising strategy then you will see an increase in sales. Once your sales begin to
                        increase you share of the market will stabilize. Once you get to this point you will probably not be able to take anymore
                        of the market from your competitors.

3. Maturity:       The third stage in the Product Life Cycle is the maturity stage. If your product completes the Introduction and Growth
                        stages then it will then spend a great deal of time in the Maturity stage. During this stage sales grow at a very fast rate
                        and then gradually begin to stabilize. The key to surviving this stage is differentiating your product from the similar
                        products offered by your competitors. Due to the fact that sales are beginning to stabilize you must make your product
                        stand out among the rest.

4. Decline:         This is the stage in which sales of your product begin to fall. Either everyone that wants to has bought your product or
                         new, more innovative products have been created that replace yours. Many companies decide to withdrawal their
                         products from the market due to the downturn. The only way to increase sales during this period is to cut your costs
                         reduce your spending.

Very few products follow the same cycle. Many products don't even make it through all four stages. Some stages even bypass stages. For example, one product may go straight from the Introduction stage to the Maturity stage. This is the problem with the PLC. There is no set way for a product to go. Therefore, every product requires a great deal of research and close supervision throughout its life. Without proper research and supervision your product will probably never get out of the first stage.
 
 

Some Useful Links:

Marketing Teacher - Product Life Cycle

Product Life Cycle