Sep 29, 2010

Product Life Cycle (PLC): Marketing Strategies for each stage

The typical product life cycle has five stages named as Product development, Introduction, Growth, Maturity and Decline. This concept of PLC is only applicable to products falls in the category of fast moving consumer goods on a large scale. Not all products follow this cycle like Fads, Style, and Fashion.
Product Development: It begins when company develops a new product development idea. Other conditions included when product sales become going towards zero, Investment costs inclined towards high on graph or when profits become start displaying on negative on measuring.
Second comes Introduction stage, in this usually sales are in low category, high cost per customer acquired, negative profits, Innovators are targeted, and a little competition exist in market. At this stage product usually consist of only some basic features, price should set as cost plus some basis to generate initial sales, and build selective distribution. As far as advertising is concerned create awareness among early adapters and resellers/dealers. While in sales promotion one should focus on heavy expenditures on creating big product trials in the market.
Growth stage brings changing scenario like rapid rise in product sales, average cost per customer, profits start rising as well, early adapters are targeted, and with all these factors competition going to start as a strong one unlike previous stages. In this stage marketing efforts could be as offering of product extension and service and warranties. Price should be focus on market penetration. Distribution at this level could be intensive and awareness will be more towards masses. At this stage as consumers increase and product demand exist in the market thus reduce the expenditure on sales promotions.
Maturity is just like spring season which comes along with it peak sales, very low cost per customer, high profits, product starts to touch middle majority customer as target, and on product good will and awareness it is start diminishing competition. All these happens just in action due to implementation of diversification in brands and models, price should set to match the heavy competition, even more intensive distribution is suitable for the product, in advertising there arrive a need to stress out the emphasize on the product benefits all core, functional and augmented along with unique selling prepositions. Sales promotion should focus on to increase in brand switching.
Everything when it starts would be possibly with lapse of time towards the end to its decline stage. It shows decline in sales and profits, low cost per customer, Laggards are targeted, and also in competition decline exist. At this stage a marketer should focus on phase out weakest items, cut price by displaying discount usually by percentages, again selective distribution with an aim to phase out unprofitable outlets, advertising should reduce to a needed level only for loyal customers, sales promotions should be reduce to minimal level.

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