Managing the Product Life

Cycle
 The Concept of Product Life
Cycle
v Most products do not live for ever. They have
a life of their own
v A conceptual framework only for
understanding how companies should
manage the product at different stages of life
cycle.
v In practical, it is difficult to measure where a
product is in its life cycle
Characteristics of PLC
 Stages of PLC
• Introduction Stage: This is the beginning stage of the
product life cycle. At this stage the sales are low, profits are
negligible or negative and companies follow a selective
distribution strategy.
• Growth Stage: In this stage, the sales grow faster, profits are
high and companies follow intensive distribution strategy.
• Maturity Stage: At this stage, the sales go flat, profits start
decline and competitors start entering into the business.
• Decline Stage: At this stage, the sales fall faster, profits often
turn negative and companies decide either to drop the product
or maintain the markets where they are doing good.
 Commoditization of Products

Introduction Growth Maturity

Decline
C
PRIC O
E C M
OST M
O
D
I
T
Average Industry I
price SA
and cost per T
unit I
O
N
Time -------------
-
A Classical Product Life Cycle
C
A B D
A=
Introduction
B=Growth
C= Maturity
D=Decline

Sales Volume

Time
Product Life Cycle And Adoption
v Product life cycle is often related to buyer
adopter categories
v Innovative new products are aimed at
innovators
 Patterns of Product Life Cycles
v There is no universal pattern of PLC
v Many aberrations