5.18:
Product Lifecycle and Relevant Strategies
The Product Life Cycle or PLC curve aids marketers in strategizing, optimally allocating resources, anticipating market trends, and making timely decisions on product evolution or discontinuation.
The PLC curve maps a product's journey through four stages: Introduction, Growth, Maturity, and Decline.
The introduction stage is characterized by low sales, requiring extensive promotion to create product awareness.
For example, Tesla targeted innovators and early adopters with aggressive marketing campaigns to foster awareness about newly launched electric vehicles.
In the growth phase, the product has been accepted by customers, leading to increased sales. Marketers enhance features or expand distribution to capture the growing consumer interest, as seen in the growth of smartwatch sales globally.
The maturity stage sees market saturation and slowing sales growth due to competition, prompting marketers to find newer markets or modify the marketing mix, like Coca-Cola's constant innovation with flavors and packaging.
The decline stage is represented by market saturation, leading to waning consumer interest and declining sales.
It leads to product phase-outs like Kodak's photo films or life extensions through repositioning like Old Spice.
5.18 Product Lifecycle and Relevant Strategies
The Product Life Cycle (PLC) curve is a powerful tool marketers use to manage a product's life and make strategic decisions. It has four stages:
- Introduction: This is when the product is launched in the market after development and testing. Marketing strategies at this stage often involve awareness creation through publicity and advertising, and pricing either through cost-plus for niche products or penetration pricing to gain market share.
- Growth: The product gains acceptance, sales rise rapidly, and competition grows. Marketers focus on brand preference and increasing market share, which is achieved through product enhancements, competitive pricing, and extensive distribution.
- Maturity: Sales growth decreases as the product saturates the market. Marketing strategies here aim to maintain market share and extend product life; this could include product modifications, diversification, price reductions, and reminder advertisements.
- Decline: The product's sales fall. Depending on the situation, marketers may discontinue the product, sell it, or rejuvenate it by adding new features or exploring new markets.
Understanding the PLC helps businesses anticipate changes in the market, adapt their marketing strategies, and make informed decisions about product portfolio management. Marketers can gain competitive insights by comparing their product's PLC with competitors.