muhammad umair akram mm103033 shahid rasool mm103020

Muhammad Umair Akram MM103033Shahid Rasool MM103020M Junaid MM103019Adiba iram MM103063

Product Life Cycle Product Life Cycle PLC is the succession of strategies used by business management as a product goes through its life cycle.

It starts with the development of a product.

For Example•A seed is planted (introduction). •It begins to grow (growth).•It shoots out leaves and puts down roots as it becomes an adult (maturity).•After a long period as an adult the plant begins to shrink and die out (decline).

Product Life Cycle Product Life Cycle The PLC indicates that products have four

things in common: They have a limited lifespan.Their sales pass through a number of distinct

stages, each of which has different characteristics, challenges, and opportunities.

Their profits are not static but increase and decrease through these stages.

The financial, human resource, manufacturing, marketing and purchasing strategies that products require at each stage in the life cycle varies (kotler and keller, 2006).

STAGES OF LIFE CYCLESTAGES OF LIFE CYCLEINTRODUCTIONGROWTHMATURITYDECLINENot all products follow this cycle: -Fads

-Styles

-Fashions

Major PLC CharacteristicsMajor PLC Characteristics

CustomersNumber of FirmProfitsProduct VarietiesDistributionForeign TradeMarketing

INTRODUCTION STAGEINTRODUCTION STAGE

Firm seeks to build product awareness and develop a market for the product.

• Aim is to satisfy a latent need.• Focus is to satisfy a generic need.• Low competition.• No significant differences found in products.• Smart entrepreneur will identify the need and

enter the market.• Firms don't need to fulfil the need by

differentiating the product from competition.• Price skimming strategy may be used here.• Marketing costs are high.

GROWTHGROWTH The firms seeks to build brand preference and increase market

share. Rapid growth in sales and profits. It is cheaper for businesses to invest in increasing market share. Need is more refined here. Now consumers are more aware of the need. Firms will try to differentiate themselves from others. Firms will try to place entry barriers. Threat of potential new entrants is high. Significant promotional resources. Firms may introduce customers support programs to acquire more

risk averse customer. Reduce prices or bundle the product with other offerings. (Porter,

1980; 1985; Kotler et al., 1996; Blackwell et al., 2001; Grant, 2002; Kotler and Armstrong, 2004).

MATURITYMATURITY Awareness of customers of the need is very high. Imports Need is highly refined. Competition is aggressive. Growth is slow at this stage. Any expense on R and D is likely to be restricted. Profits are increasing at decreasing rate. this may involve starting new users or market

segments, or making significant modifications to the product, perhaps improving its quality, reliability or some aesthetic feature.

Cost minimization -Plant size -Distribution

DECLINEDECLINE Final stage. A war of slow destruction. Firms will wipe out from the market. Market is shrinking. Demand may be fully satisfied. Firms will develop new product or services. Firms will try to jump to other life cycle stage by

changing strategies. (Doole and Lowe, 2004). During this stage, a few laggards adopt the product but

these are rarely a profitable customer group.  Such a decline may be the result of technological

developments, changes in consumer purchasing behavior or significant increases in competition (porter, 1980; 1985; kotler et al., 1996; kotler and armstrong, 2004; grant, 2002). 

PROBLEMS WITH PLCPROBLEMS WITH PLC

In reality very few products follow such a prescriptive cycle.

The length of each stage varies enormously.

The decisions of marketers can change the stage.

It is not easy to tell which stage the product is in.

APPLICATIONS OF PLCAPPLICATIONS OF PLC

• PLC determines revenue earned.• PLC analysis can be used both Proactively

and Retrospectively.• Contributes to strategic marketing• planning. • It helps a firm to manage the risk of

launching a new product more effectively.• May help the firm to identify when a

product needs support, redesign, withdrawal, etc.

• May help in forecasting and managing cash flow.

• A survival tool for a product to compete in the industry.

Data sources for PLC Data sources for PLC analysisanalysis

When engaging in a PLC analysis, a researcher may benefit from using some of the following resources:

Annual reportsAcademic and commercial marketing

journals and magazines News reports on the internetProduct report.

THANKS FOR PATIENCE THANKS FOR PATIENCE