The __________ is the plc stage in which a product’s sales start climbing quickly.
The Product Life CycleEvery product goes through the various life cycle phases of introduction, growth, maturity and decline. Show
Learning Objectives Discuss the rationale behind the marketing concept of product life cycles Key TakeawaysKey Points
Key Terms
Product Life Cycle: Overview The product life cycle (PLC) describes the life of a product in the market with respect to business/commercial costs and sales measures. It proceeds
through multiple phases, involves many professional disciplines and requires a multitude of skills, tools and processes. The stages of the product life cycle are:
PLC management makes these three assumptions:
The product life cycle begins with the introduction stage (see ). Just because a product successfully completes the launch stage and starts its life cycle, the company cannot take its success for granted. Product Development and Product Life Cycle: The Product Life Cycle follows directly after new product development. A company must succeed at both developing new products and managing them in the face of changing tastes, technologies and competition. A good product manager should find new products to replace those that are in the declining stage of their life cycles; learning how to manage products optimally as they move from one stage to the next. Product Lifecycle Management Stage 1: Market Introduction This stage is characterized by a low growth rate of sales as the product is newly launched and consumers
may not know much about it. Traditionally, a company usually incurs losses rather than profits during this phase. Especially if the product is new on the market, users may not be aware of its true potential, necessitating widespread information and advertising campaigns through various media.
GrowthDuring the growth stage, the public becomes more aware of the product; as sales and revenues start to increase, profits begin to accrue. Learning Objectives Identify the conditions that exist when a product is in stage 2, growth of the Product Life Cycle Key TakeawaysKey Points
Key Terms
The stages of the product life cycle are:
Product Lifecycle Management Stage 2: GrowthThe growth stage is the period during which the product eventually and increasingly gains acceptance among consumers, the industry, and the wider general public. During this stage, the product or the innovation becomes accepted in the market, and as a result sales and revenues start to increase. Profits begin to be generated, though the break even point is likely to remain unbreached for a significant time--even until the next stage, depending on the cost and revenue structures. Growth Stage: The graph shows the growth stage in the overall product life cycle. Initial distribution is expanded
further as demand starts to rise. Promotion is increased beyond the initially high levels, and word-of-mouth advertising leads to more and more potential customers hearing about the product, trying it out, and--if the company is lucky--choosing to use the product regularly. Repeat orders from initial buyers are also obtained.
MaturityDuring the maturity stage, sales will peak as the product reaches market saturation, and competition will grow increasingly fierce. Learning Objectives Identify the market conditions of a product in stage 3, maturity of the product life cycle. Key TakeawaysKey Points
Key Terms
The stages of the product life cycle are:
Product Lifecycle Management Stage 3: MaturityThe maturity stage follows the growth stage in the product's life cycle (see ). Maturity Stage: The maturity stage of the product life cycle shows that sales will eventually peak and then slow down. During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. Ultimately, during this stage, sales will peak. The company will want to prolong this phase so as to avoid decline, and this desire leads to new innovation and features in order to continue to compete with the competition which, by now,
has become very established, advanced and fierce. Competitors ' products will begin to cut deeply into the company's market position and market share. However, despite this, sales continue to grow in the early part of the maturity phase. But, these sales will peak and ultimately decline, as the graph shows.
The stage that lasts the longest in the product life cycle is the Maturity stage. It is at this time that repeat business and purchases take the place of new customer buying. So, during the maturity stage, the following occurs:
DeclineDuring decline, sales growth becomes negative, profits decline, competition remains high, and the product ultimately reaches its 'death'. Learning Objectives Identify the characteristics of a product in the decline stage of the product life
cycle. Key TakeawaysKey Points
Key Terms
The stages of the product life cycle are:
Product Lifecycle Management Stage 4: DeclineThe decline stage of the product life cycle is the one where the product ultimately 'dies' due to the low or negative growth rate in sales (see ). Decline Stage: The decline stage of the product life cycle is the terminal stage where sales drop and production is ultimately halted.
Profitability will fall, eventually to the point where it is no longer profitable to produce, and production will stop. As a number of companies start to dominate the market, it becomes increasingly difficult for the company in question to maintain its level of sales. Consumer tastes also change, as do new technologies which may make the product become ultimately obsolete (as in the case of CDs and DVDs, and now Blu-Ray).
It is important to note that product termination is not usually the end of the business cycle; rather, it is only the end of a single entrant within
the larger scope of an on-going business program. Product life cycle of the personal computer: The chart shows the rise and fall of personal computers. Product Life-Cycle CurveProduct life cycles are a useful guide to lifetime sales and profits, and can help marketers understand what strategies to deploy & when. Learning Objectives Discuss characteristics of a product's life cycle curve Key TakeawaysKey Points
Key Terms
Understanding Product Life Cycle Curves It is important for marketing managers to understand the limitations of the product life cycle model. A rise in sales per se is not necessarily evidence of growth, just as a fall in sales does not typify decline. Some products like Coca Cola and Pepsi may not experience a decline at all. Sales and Profits: The diagram shows the sales and profits of a given product during the course of the product life cycle. Break Even: The diagram shows when a product is expected to break even once it is introduced into the market. ExamplesFacebook Impact of the Product Life Cycle on Marketing StrategyThe stage of the life cycle of the product affects how it is marketed. Learning Objectives Summarize marketing strategies that apply to product life cycles Key TakeawaysKey Points
Key Terms
IntroductionThe stages through which individual products develop over time is called commonly known as the "Product Life Cycle." Product Life Cycle Stages: The table shows the product life cycle stages and the different marketing characteristics that accompany and identify them. The product life cycle is a well-known framework in marketing. Products typically go through four stages:
After a period of development, the product is introduced or launched into the market. It gains more and more customers as it grows and, eventually, the
market stabilizes and the product becomes mature. Then after a period of time, the product is overtaken by development and the introduction of superior competitors, goes into decline, and is eventually withdrawn. Strategies for the Different Stages of the Product Life CycleIntroductionThe need for immediate profit is not a pressure. The product is promoted to create awareness and develop a market for the product. The impact on the marketing mix and strategy is as follows:
GrowthCompetitors are attracted into the market with very similar offerings. In the growth stage, the firm seeks to build brand preference and increase market share.
MaturityThose products that survive the earlier stages tend to spend longest in this phase. At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.
Decline At this point, there is a downturn in the market. For example, more innovative products are introduced or consumer tastes have changed. There is intense price cutting, and many more products are withdrawn
from the market. Profits can be improved by reducing marketing spending and cost cutting.
By imaginatively repositioning their products, companies can change how customers mentally categorize them. They can rescue products struggling in the maturity phase of their life cycles and get them back to the growth phase. And in some cases, they might be able take their new products forward straight into the growth phase. The Con of Using Product Life Cycles to Direct Strategies According to Harvard Business School professor Youngme Moon, though the product life cycle
concept has been used successfully over the past 40 years, it has made marketers assume that there is only one trajectory for successful products. By viewing the product life cycle in the same way, marketers pursue similar positioning strategies for products and services during each stage of the life cycle. In the process, they miss out on opportunities to differentiate themselves. Licenses and AttributionsCC licensed content, Shared previously
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Is the PLC stage in which a product's sales fade away?The maturity stage of the product life cycle is the stage in which the growth in sales slows down. The product life cycle's decline stage is when a product's sales fade away.
Which stage in the product life cycle represents the level in which both sales and competition increase?Growth Stage
The second stage of the product life cycle is considered the key stage for many businesses and manufacturers in establishing “a product's position in a market, increasing sales, and improving profit margins.”
What happens to the sales revenue line on the PLC graph in the introduction and growth stages of the consumer adoption process?- The sales revenue line increases dramatically in introduction and growth stages as the product moves through the consumer adoption process.
At what stage of the product life cycle does it first become true that most consumers?The Introduction stage of the product life cycle is the time when your product is making its first impression on the consumer. The introduction or launch of a product is a critical time for its success, but it does not necessarily make or break the product's chances of success.
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