ASSIGNMENT ANSWER: Product Life Cycle and Its Features

The total lifespan of a product initiating from its development, going through testing, promotion, evolution, and marketing till its deterioration or renewal is known as the life cycle of a product.

In simple words, you can say that the life cycle of a product includes the stages from which every product goes through starting from its introduction in different types of the market to its withdrawal.

FEATURES OF PRODUCT LIFE CYCLE

  1. Every product has a life cycle whether it is a human being, animal or plant.
  2. Every product’s life cycle initiates from its introduction and then goes through different stages of development, maturity, and decline in the market.
  3. The movement speed of every product through different stages of its life cycle is different.
  4. Due to competitive circumstances, profits in every business venture tends to decline in the stage of maturity of the product whereas grow quickly in the introduction stage. The percentage of sales, however, increases in the maturity stage.
  5. Some changes in the research and development, pattern of production, advertising and marketing are important due to a decrease in profits in the maturity stage.

Let’s now move forward to the different stages in Product Life Cycle (PLC)

There are four stages in the Product Life Cycle

  1. INTRODUCTION
  2. GROWTH
  3. MATURITY
  4. DECLINE

 

Introduction stage

In this stage, the product is brought into the market. The marketing activities included in this stage are more. The main aim of this stage is to create awareness in the minds of the customers about the product.

Features of this stage include:

  • Sales in this stage are less.
  • Because the business venture has to experience scale economies, cost of production per unit is high.
  • Due to low sales and high cost per unit, profits are generally low.
  • The number of competitors in the market is also less.
  • As this stage includes all the marketing activities to promote the product, cost of marketing tends to be high.
  • Sometimes, the same innovative products are launched in the market.

Growth stage

Usually, sales take off at this stage as the market already knows about the product. Market shares get stabilized and profits start incurring.

Features of this stage include:

  • During this stage, sales tend to increase.
  • Due to economies of scale, cost decreases.
  • Profits increase significantly.
  • The competition also grows
  • The consumers in this stage are price sensitive which makes them cautious while adopting the product.

Maturity stage

In this stage, though sales increase but at a slow rate. Most common characteristics of this stage are product differentiation, sales promotion, and price wars.

Features of this stage are:

  • In the early stage of maturity, sales tend to grow but at a much slower rate. Sometimes, sales reach the peak point which may or may not last for a long period of time. For most of the commodities, this stage is the longest one.
  • Due to saturation in the market and increasing competition, costs per unit of the product increases.
  • Because of poor margins, many market players being to exit.
  • Last but not the least, profits start declining in this phase.

Decline stage

In this stage, sales drop due to various reasons like consumers may have changed, the product is not useful anymore. Price wars continue to prevail in the market. Business ventures have many options like they can discontinue to manufacture the product, find new and different uses of the product or can export their product.

Features of this stage are:

  • This stage is associated with a decrease in revenue.
  • There is a recession in the market.
  • Profits margins are low.
  • Due to change in the needs and preferences of the customers, they start using new products.

Conclusion:

Many manufacturing organizations produce different products which are at different phases of a product life cycle during a specific period of time. If the analysis of a product lifecycle is done properly, it can help the organization to improve the health of its product. It helps to have a glance over the market to adopt some corrective measures faster.