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Like human beings, products also have a life-cycle. From birth todeath, human beings pass through various stages e.g. birth,growth, maturity, decline and death. A similar life-cycle is seen inthe case of products. The product life cycle goes through multiplephases, involves many professional disciplines, and requires manyskills, tools and processes. Product life cycle (PLC) has to do withthe life of a product in the market with respect tobusiness/commercial costs and sales measures. To say that aproduct has a life cycle is to assert three things:

Products have a limited life,Product sales pass through distinct stages, each posing

different challenges, opportunities, and problems to the seller,Products require different marketing, financing,manufacturing, purchasing, and human resource strategies ineach life cycle stage.

The four main stages of a product's life cycle and theaccompanying characteristics are:

Stage Characteristics

1. Market introductionstage

1. costs are very high

2. slow sales volumes to start

3. little or no competition

4. demand has to be created

5. customers have to be prompted to try the product

6. makes no money at this stage

2. Growth stage1. costs reduced due to economies of scale2. sales volume increases significantly

3. profitability begins to rise

4. public awareness increases

5. competition begins to increase with a few new players in

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establishing market

6. increased competition leads to price decreases

3. Maturity stage

1. costs are lowered as a result of production volumes increasing

and experience curve effects

2. sales volume peaks and market saturation is reached

3. increase in competitors entering the market

4. prices tend to drop due to the proliferation of competing

products

5. brand differentiation and feature diversification is emphasized

to maintain or increase market share

6. Industrial profits go down

4. Saturation anddecline stage

1. costs become counter-optimal

2. sales volume decline or stabilize

3. prices, profitability diminish

4. profit becomes more a challenge of production/distribution

efficiency than increased sales

[edit ]Request for deviation

In the process of building a product following defined procedure, anRFD is a request for authorization, granted prior to themanufacture of an item, to depart from a particular performance[edit ]Market identification

Termination is not always the end of the cycle; it can be the end of a micro-entrant within the grander scope of a macro-environment.The auto industry, fast-food industry, petro-chemical industry, arejust a few that demonstrate a macro-environment that overall has

not terminated even while micro-entrants over time have come andgone.

[edit ]Lessons of the product life cycle (PLC)

It is claimed that every product has a life period, it is launched, itgrows, and at some point, may die. A fair comment is that - at least

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in the short term - not all products or services die. Jeans may die,but clothes probably will not. Legal services or medical servicesmay die, but depending on the social and political climate, probablywill not. ]

[edit ]Limitations

The PLC model offers some degree of usefulness to marketingmanagers, in that it is based on factual assumptions. Nevertheless,it is difficult for marketing management to gauge accurately wherea product is on its PLC graph. A rise in sales per se is notnecessarily evidence of growth. A fall in sales per se does not typifydecline. Furthermore, some products do not (or to date, at theleast, have not) experienced a decline. Coca Cola and Pepsi areexamples of two products that have existed for many decades, butare still popular products all over the world. Both modes of colahave been in maturity for some years.

Another factor is that differing products would possess differentPLC "shapes". A fad product would hold a steep sloped growthstage, a short maturity stage, and a steep sloped decline stage. Aproduct such as Coca Cola and Pepsi would experience growth,but also a constant level of sales over a number of decades. It canprobably be said that a given product (or products collectivelywithin an industry) may hold a unique PLC shape, and the typicalPLC model can only be used as a rough guide for marketingmanagement. This is why its called the product life cycle. Theduration of PLC stages is unpredictable. It is not possible to predictwhen maturity or decline will begin. Strict adherence to PLC canlead a company to misleading objectives and strategyprescriptions.

[edit ]

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