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    Product Life Cycle Answer

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    Ritu
    The product life cycle concept describes the stages a product goes through from introduction to decline or removal from the market. It typically includes four stages: introduction, growth, maturity, and decline. As an example, typewriters were introduced in the late 19th century and grew in popularity before being replaced by computers, laptops, and smartphones, causing their revenues and demand to drop off and enter the decline stage of the product life cycle. Each stage is characterized by different trends in sales, profits, competition levels, and marketing strategies.

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    Product Life Cycle Answer

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    Ritu
    124 views5 pages
    The product life cycle concept describes the stages a product goes through from introduction to decline or removal from the market. It typically includes four stages: introduction, growth, maturity, and decline. As an example, typewriters were introduced in the late 19th century and grew in popularity before being replaced by computers, laptops, and smartphones, causing their revenues and demand to drop off and enter the decline stage of the product life cycle. Each stage is characterized by different trends in sales, profits, competition levels, and marketing strategies.

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    Product life cycle

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    PRODUCT LIFE CYCLE ANSWER

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    The product life cycle concept describes the stages a product goes through from introduction to decline or removal from the market. It typically includes four stages: introduction, growth, maturity, and decline. As an example, typewriters were introduced in the late 19th century and grew in popularity before being replaced by computers, laptops, and smartphones, causing their revenues and demand to drop off and enter the decline stage of the product life cycle. Each stage is characterized by different trends in sales, profits, competition levels, and marketing strategies.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    124 views5 pages

    Product Life Cycle Answer

    Uploaded by

    Ritu
    The product life cycle concept describes the stages a product goes through from introduction to decline or removal from the market. It typically includes four stages: introduction, growth, maturity, and decline. As an example, typewriters were introduced in the late 19th century and grew in popularity before being replaced by computers, laptops, and smartphones, causing their revenues and demand to drop off and enter the decline stage of the product life cycle. Each stage is characterized by different trends in sales, profits, competition levels, and marketing strategies.

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    The 

    Product life cycle concept is the explanation of the product from its


    birth to death as a product exists in different stages and environments  

    The product life cycle is the process a product goes through from when it
    is first introduced into the market until it declines or is removed from the
    market

    While some products may stay in a prolonged maturity state, all products
    eventually phase out of the market due to several factors including
    saturation, increased competition, decreased demand and dropping sales

    Additionally, companies use PLC analysis (examining their product's life


    cycle to create strategies to sustain their product's longevity or change it
    to meet with market demand or developing technologies

    For example

     Typewriter

    A classic example of the scope of the product life cycle is the typewriter.
    When first introduced in the late 19th century, typewriters grew in
    popularity as a technology that improved the ease and efficiency of
    writing. However, new electronic technology like computers, laptops and
    even smartphones have quickly replaced typewriters - causing their
    revenues and demand to drop off
    The product life cycle has four stages

    introduction,
    growth,
    maturity,
    decline

    o Introduction Stage
    Introduction stage starts when a new product is made available for
    purchase. Consumers are not aware of product, or they may not have
    general opinion and experience regarding product. Moreover, a new
    product has to face the existing products. So, the sales remain limited

    In the very initial stage, there is loss or negligible profit. During this
    period, the direct competition is almost absent. Company has not
    mastered production and selling problems. Price is normally high to
    recover/offset costs of development, production, and marketing with
    minimum sales. So, sales rise gradually

    Characteristics of introduction stage include

     Huge selling and promotional costs are required to increase


    awareness of customers.
     Price is kept high to recover high development, production, and
    marketing costs.
     Marketer has to tackle technical and production problems.
     Sale is low and increasing at a lower rate.

    2
     There is loss or negligible profit.
     There is no competition

    o Growth Stage
    This is the stage of a rapid market acceptance. Due to increased
    awareness, the product gets positive response from market. This stage is
    marked by a rapid climb in sales. Sales rise at the increasing rates Profits
    follow the sales. Seller shifts his promotional attempts from try my
    brand to buy my brand

    Company tries to develop effective distribution network. Here, the most


    of production and marketing problems are mastered. Due to rise in
    profits, competitors are attracted. At a right time, price may be reduced
    to attract the price-sensitive buyers.

    Company continues, even increases, its selling and promotional efforts


    to educate and convince the market and meet competition. At the end
    of growth stage, sales start increasing at decelerated rate,
    consequently, profits starts to decline

    Characteristics of growth stage include


     Sales increase rapidly (or at increasing rate) as a result of
    consumer acceptance of the products
     Company can earn maximum profits
     Competitors enter the market due to attractive profits
     Price is reduced to attract more consumers
     Distribution network is widened and improved
     Necessary primary changes are made in product to remove defects.
     Company enters the new segments and new channels are selected.

    o Maturity Stage

    This stage is marked with slow down of sales growth. Sales continue to
    rise but at decreasing rate. Competitors have entered the market and
    existing products face severe competition
    Sales curve is pushed downward. It is just like an inverse U

    3
    During this stage, for certain period of time, sales remain stable. This
    level is called the Saturation. Profits also decline.
    Normally, this stage lasts longer and marketers face formidable
    challenges

    The stages may be divided into three phases


     Growth Maturity,
    Sales-growth rate starts to decline

     Stable Maturity,
    Sales remain stable

     Decline Maturity,
    Sales now start to decline

    Marginal producers are forced to drop out the products. Those who
    operate formulate various strategies to extend the stage. Market,
    products, and marketing programme are to be modified to sustain
    the stage

    Characteristics of maturity stage include


     Sales increase at decreasing rate
     Profits start to decline
     Marginal competitors leave the market
     Customer retention is given more emphasis
     Product, market, and marketing mix modifications are undertaken.

    Several possible strategies for the stage are as under


     Product qualities and features improvement
     Adding new models and improving styling
     Entering new market segments
     Designing, improving and widening distribution network
     Shifting advertising and other promotional efforts from increasing
    product awareness to product conviction
     Reducing price at the right time to attract price-sensitive consumers
     Preventing competitors to enter the market by low price and high
    promotional efforts

    4
    o DECLINE STAGE

    This is the last stage of product life cycle. Here, sales start declining
    rapidly. Profits also start erasing. There is a minimum profit or even a
    little loss. Advertising and selling expenses are reduced to realise some
    profits. This stage is faced by only those who survived in maturity stage

    Most products obsolete as new products enter the market. All products
    have to face the stage earlier or later. New products start their own life
    cycle and replace old ones

    A number of competitors withdraw from the market. Those who remain in


    the market prefer to drop smaller segments, make minor changes in
    products, and continue selling the products in profitable segments and
    channels

    Characteristics of decline stage include


     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 sellers withdraw from the market
     Promotional expenses are reduced to realize a little profit

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