Product Life Cycle Flashcards
What is the Product Life Cycle (PLC)?
A framework describing the stages a product goes through from introduction to decline.
What are the four stages of the PLC?
Introduction, Growth, Maturity, and Decline.
The PLC can be observed in products like the iPod, which has gone through all stages.
What is the primary goal during the introduction stage?
To build awareness and stimulate demand.
What are the characteristics of the introduction stage?
High costs, low sales, and heavy promotion efforts.
Tesla’s Roadster in 2008 marked the introduction of Tesla’s electric vehicles.
What pricing strategy is common during the introduction stage?
Price skimming or penetration pricing to attract early adopters.
Why is investment in marketing crucial during this stage?
To educate the market and overcome consumer resistance.
When Netflix launched streaming, it invested heavily in advertising and free trials.
What is the primary goal during the growth stage?
To maximize market share and establish a strong brand presence.
What characterizes the growth stage?
Rapid sales growth, economies of scale, and increased competition.
Smartphones experienced explosive growth during the late 2000s, with Samsung and Apple leading.
What happens to production costs during the growth stage?
Costs per unit decline due to higher sales volumes and efficiencies.
What is a major risk during the growth stage?
New competitors entering the market, driving prices down.
The plant-based meat industry is in its growth phase, with brands like Beyond Meat and Impossible Foods.
What is the primary focus during the maturity stage?
To defend market share and maximize profitability.
What happens to sales growth during the maturity stage?
Sales growth slows, and the market becomes saturated.
Coca-Cola operates in the maturity stage, focusing on defending its global market share.
How do companies differentiate during maturity?
By improving product features or adding services.
Why are promotional efforts often increased in the maturity stage?
To maintain interest and loyalty among consumers.
McDonald’s regularly updates its menu to retain customer interest in a mature market.
What is the primary goal during the decline stage?
To minimize losses and make decisions about discontinuing or rejuvenating the product.
What characterizes the decline stage?
Falling sales, reduced profit margins, and market contraction.
DVD players entered decline as streaming services like Netflix and Disney+ grew.
What strategies can companies adopt in the decline stage?
Harvesting (reducing investments) or divesting (discontinuing the product).
How can a product be rejuvenated during decline?
By targeting a niche market or innovating its features.
Polaroid cameras were revitalized by marketing them as retro devices for younger audiences.
Why does the PLC guide marketing strategies?
It helps allocate resources effectively based on the product’s stage.
How does the PLC influence pricing decisions?
Pricing strategies vary, such as skimming in introduction and discounts in maturity.
Apple reduces iPhone prices as models age, targeting price-sensitive buyers.
How does advertising evolve throughout the PLC?
Heavy advertising during introduction, brand reinforcement during growth, and cost-cutting in decline.
How does the PLC affect distribution strategies?
Limited distribution during introduction, expanded networks in growth, and scaled-back efforts in decline.
Spotify expanded rapidly in its growth phase by partnering with telecom providers globally.
What stage of the PLC are electric vehicles currently in?
Growth stage, as demand and competition increase globally.
Tesla leads in the growth stage of EVs, while legacy automakers like Ford are entering the phase.
What stage of the PLC are desktop computers in?
Decline stage, due to the rise of laptops and mobile devices.
Dell focuses on business solutions to sustain profitability in a declining market.
How did Coca-Cola manage its maturity stage?
By diversifying its portfolio into diet drinks, juices, and bottled water.
What stage of the PLC are fitness trackers in?
Maturity, with brands like Fitbit and Garmin focusing on differentiation through advanced features.
Can the PLC stages overlap?
Yes, products may experience features of multiple stages simultaneously.
Why is the PLC criticized for being too rigid?
It assumes all products follow a predictable path, which isn’t always the case.
Fidget spinners skipped directly from introduction to decline.
How can a company extend the PLC?
By introducing upgrades, rebranding, or targeting new markets.
What is an example of a product extension?
Microsoft extended the life of Windows through updates and new versions.
