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By Er.

Akash Bansal & Pankur Raheja


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PLC - Product Life Cycle


The purpose of having a diagram is to help you

understand the changes, in the revenue that is made, as you go through the different stages of selling a product, from the beginning, to the end.

Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Digital cameras
Mini-disc
Electric cars

DVD VR*
*= virtual reality

The time at each stage varies 3 greatly

Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Introduction The seller tries to stimulate demand Promotion campaigns to get increase public awareness Explain how the product is used,

Features Advantages

Benefits

You will lose money, but you expect to make profits in the future
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Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Introduction Sales are low, and profits are below the line because your costs are greater than the amount of money you make you have negative profit

Need to spend a lot of money on promotion

Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Growth A lot is sold - The seller tries to sell as much as possible Other competitor companies watch, and decide about joining in with a competitor product

success breeds imitation (Text)


Growth will continue until too many competitors in the market - and the market is saturated
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Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Growth At the end of the growth stage, profits start to decline when competition means you have to spend more money on promotion to keep sales going. Spending money on promotion cuts into your profit

Stages in the Product Life Cycle


Introduction Maturity Many competitors have joined - the market is saturated The only way to sell is to begin to lower the price - and profits decrease It is difficult to tell the different between products since most have the same F.A.B. - Features, Advantages & Benefits Competition can get Nasty and commercials are intense
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Growth

Maturity

Decline

Stages in the Product Life Cycle


Introduction Maturity Persuasive Promotion becomes more important during this stage That is to say, you have commercials almost begging the customer to still buy your product because you still make it just as good. Growth Maturity Decline

Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Decline Newer products are now more attractive - even a low low price does not make consumers want to buy. Profit margin declines - and so the only way to make money is to sell a high volume

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Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Decline To increase volume you try to 1. Increase the number of customers - get new customers 2. Increase the amount each customer uses

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Extending the Product Life Cycle

Market Modification

1. Increase frequency of use by present customers


2. Add new users 3. Find new uses

Product Modification

4. Change product quality or packaging

Purpose: to sell more product and cover original investment


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Extending the product Cycle


to prevent the product going into decline you

modify the market MARKET MODIFICATION you look for new consumers by changing the product so it has new users - and then new customers (Baking soda, vinegar, Q-tips, Avon

Skin So Soft, vaseline

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Extending the product Cycle


MARKET MODIFICATION

examples Windex for cleaning jewelry Javex bleach for toilets Lemons for hair colouring beer for hair Bounce for in the garbage, gym bag etc.

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Extending the product Cycle


to prevent the product going into decline you

modify the product PRODUCT MODIFICATION adding new features, variations, model varieties will change the consumer reaction - create more demand therefore you attract more users

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Extending the product Cycle


PRODUCT MODIFICATION examples CD players chip flavours - many kinds flavoured tongue depressors couples seats at movie theatre

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Extending the product Cycle


PRODUCT MODIFICATION examples continued digital sound at theatres

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Overlap of Life Cycle for Products A and B

WINDOWS 3.1

WINDOWS 95

1991

1995

1996

1997

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Most people have a problems thinking this theory is relevant because they apply it to specific product brands - it should be applied only to a general product category

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Length of Cycle Stages


Products move through the cycle at different speeds
sometimes introduction is very long, or very

short, depending on how easy it is for the public to understand the F.A.B. Not all products follow the same pattern

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Life Cycle Length


Some products move very fast because they are

new and have no competition so the intro stage is short, and they go direct to growth stage.

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Life Cycle Length


Because of technology and globalization the introduction stage is getting very short some cycles more quickly to maturity, then have many product modifications so the decline stage drags on and on

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Speed of the PLC


Since the Intro Stage is getting shorter, and

sometimes the Growth Stage doesnt last too long (because competitors move in) companies must continually come up with new products You can tell when they are in the growth stage because this is when they introduce new model variations, and some improvements to the product

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Product Life Cycle Considerations in Marketing Strategy


Understand that profits have a predictable pattern
in the early stages, focus is on product

information in the later stages, focus is on brand promotion use market segmentation in maturity stage to maintain strong core customer basis

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Stages in the Product Life Cycle


Introduction Growth Maturity Decline

Digital cameras
Mini-disc
Electric cars

Monopoly
*= virtual reality

Monopolistic

Oligopoly

Pure Competition

The time at each stage varies greatly


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