According to PHILIP KOTLER “The product life cycle is an attempt to recognize distinct stages in sales history of the product.”
The product life cycle (PLC) concerns with the study of the degree of product acceptance by the market over time. It includes major raises & falls of sales during its life.
- Huge selling & promotion cost are required to increase awareness of the customers.
- Price is kept high to recover high development, production & marketing cost
- Marketer has to tackle technical and production problems
- Sales are low and increasing at a lower rate.
- There is loss or negligible profit
- There is no competition.
- Sales increase rapidly as a result of consumer acceptance of the products.
- The company can earn maximum profits.
- Competitors enter the market due to attractive profits
- Price is reduced to attract more customers
- Distribution network is widened and improved
- Necessary primary changes are made in products to remove defects
- A company enters the new segments and channels are selected.
- Growth maturity
- Stable maturity
- Decline maturity
- Sales increase at decreasing rate
- Profits start declining
- Marginal competitors leave the market
- Customer retention is given more emphasis
- Product, market & marketing mix modifications are undertaken.
DECLINE STAGE :
- Sales fall rapidly
- Profits fall more rapidly than sales
- Product modification is adopted
- Gradually, the company prefers to shift resources to new products.
- Most of the sellers withdraw from the market
- Promotional expenses are reduced to realize a little profit.