PRODUCT LIFE CYCLE
Product Life Cycle (PLC) is used to map the lifespan of a product. Describes the sales pattern of a product over time
Description: 4 stages
Introduction: When the product is brought into the market. In this stage, there's heavy marketing activity, the product is put into limited outlets .Sales take off slowly in this stage. The need is to create awareness, not profits.
Growth. In this stage, sales take off, the market knows of the product; other companies are attracted, profits begin to come in and market shares stabilize.
Maturity, where sales grow at slowing rates and finally stabilize. In this stage, products get differentiated, price wars and sales promotion become common and a few weaker players exit.
Decline. Here, sales drop, as consumers may have changed, the product is no longer relevant or useful. Price wars continue, several products are withdrawn and cost control becomes the way out for most products in this stage.
Significance of PLC: PLC analysis, if done properly, can alert a company as to the health of the product in relation to the market it serves. PLC also forces a continuous scan of the market and allows the company to take corrective action faster. But the process is rarely easy.
Description: 4 stages
Introduction: When the product is brought into the market. In this stage, there's heavy marketing activity, the product is put into limited outlets .Sales take off slowly in this stage. The need is to create awareness, not profits.
Growth. In this stage, sales take off, the market knows of the product; other companies are attracted, profits begin to come in and market shares stabilize.
Maturity, where sales grow at slowing rates and finally stabilize. In this stage, products get differentiated, price wars and sales promotion become common and a few weaker players exit.
Decline. Here, sales drop, as consumers may have changed, the product is no longer relevant or useful. Price wars continue, several products are withdrawn and cost control becomes the way out for most products in this stage.
Significance of PLC: PLC analysis, if done properly, can alert a company as to the health of the product in relation to the market it serves. PLC also forces a continuous scan of the market and allows the company to take corrective action faster. But the process is rarely easy.