product life cycle Flashcards
What is the Product Life Cycle?
The Product Life Cycle (PLC) describes the stages a product goes through from its introduction to the market until its decline or withdrawal.
What are the stages of the Product Life Cycle?
Introduction
Growth
Maturity
Decline
What happens in the Introduction stage of the Product Life Cycle?
- The product is launched.
- Sales are typically low, and marketing costs are high.
- Profits are usually negative due to the high costs of promotion and development.
- The focus is on creating product awareness and market penetration.
What happens in the Growth stage of the Product Life Cycle?
- Sales increase rapidly as the product gains market acceptance.
- Profits begin to rise due to economies of scale.
- Competitors may enter the market.
- Focus is on building brand preference and increasing market share.
What happens in the Maturity stage of the Product Life Cycle?
- Sales growth slows or stabilizes.
- Market saturation may occur, leading to intense competition.
- Profits may peak and then start to decline as competition leads to price cuts.
-Focus is on differentiation, efficiency, and maintaining market share.
What happens in the Decline stage of the Product Life Cycle?
- Sales and profits decline as the product becomes obsolete or consumer preferences change.
- Businesses may choose to withdraw the product or reduce marketing expenditure.
- Focus may shift to reducing costs and finding niche markets or re-inventing the product.
What strategies are used during the Introduction stage?
- Heavy promotion to build product awareness.
- Price skimming or penetration pricing to establish market presence.
- Focus on targeting early adopters.
What strategies are used during the Growth stage
- Expand distribution channels to reach more customers.
- Invest in advertising to strengthen brand loyalty.
- Improve product features or customer service to differentiate from competitors.
What strategies are used during the Maturity stage?
- Offer discounts or promotions to stimulate sales.
- Diversify the product line (e.g., new versions or upgrades).
- Focus on maintaining strong customer relationships and loyalty programs.
What strategies are used during the Decline stage?
- Reduce costs by cutting production or marketing budgets.
- Consider selling the product in niche markets.
- Discontinue the product or re-launch it with updates.
How can the Product Life Cycle affect marketing decisions?
The marketing mix (product, price, place, promotion) needs to adapt to each stage of the PLC to maximize profitability and maintain competitiveness.
What is an extension strategy in the Product Life Cycle?
A strategy used to prolong the life of a product in the maturity stage, such as modifying the product, changing its marketing, or exploring new markets.
