product life cycle by abhishek wanjari

DR. DY PATIL INSTITUTE OF MANAGEMENT AND

RESEARCH,PIMPRIDEPARTMENT OF M.B.A

Presentation On :Product Life Cycle Process

The product life-cycle theory is an economic theory that was developed by Raymond

Vernon in 1966.

Product Life Cycle (PLC)

• Just as people go through infancy, childhood, adulthood and old age, so too do products and brands. And just as we swing from being needy, to being overall contributors to our families or to society, and then back to being needy again over the course of our lives, so – in effect – do products.

The four phases usually used to describe a product's life cycle are:1) Introduction.2) Growth.3) Maturity.4) Decline.

PLC Goals • The goals of Product Life Cycle management (PLM) are to reduce time to

market, improve product quality, reduce prototyping costs, identify potential sales opportunities and revenue contributions, and reduce environmental impacts at end-of-life.

• To create successful new products the company must understand its customers, markets and competitors. Product Lifecycle Management (PLM) integrates people, data, processes and business systems.

• It provides product information for companies and their extended supply

chain enterprise.

Stages and it’s Characteristics

I. Market introduction stage:

A. Costs are very highB. Slow sales volumes to startC. Little or no competitionD. Demand has to be createdE. Customers have to be prompted to try the productF. Makes little money at this stage

Strategies Across Stages of Product Life Cycle

• According to P. Kotler , Management can pursue one of the four strategies on the basis of high low price and promotion.

2.Growth Stage:

A. Costs reduced due to economies of scaleB. Sales volume increases significantlyC. Profitability begins to riseD. Public awareness increasesE. Competition begins to increase with a few new players in

establishing marketF. Increased competition leads to price decreases

3. Maturity stage:

A. Costs are decreased as a result of production volumes increasing and experience curve effects

B. Sales volume peaks and market saturation is reachedC. Increase in competitors entering the marketD. Prices tend to drop due to the proliferation of competing productsE. Brand differentiation and feature diversification is emphasized to maintain

or increase market shareF. Industrial profits go down

4.Decline Stage:

A. Costs become counter-optimalB. Sales volume declineC. Prices, profitability diminishD. Profit becomes more a challenge of production/distribution efficiency

than increased sales

Identifying PLC stages :

Product Life Cycle of LUX

Introduction to LUX

1916 LUX launched in USA as Laundry Shop

1925 LUX Launched in USA

as Toilet Soap

1929 LUX Launched in INDIA

1960 LUX went Colored

Product Life Cycle

Introduction Stage(1929-1950s)

Growth Stage-(1950s-1990s)

Maturity Stage-(1990s to till date)