Marketing Knowledge: Importance of Product Life Cycle for IBPS, SBI and Other Competitive Exams

Importance of Product Life Cycle & Product Policy Decision

Importance of a Product life cycle 

Following are the importance of product life cycle;

1) Life of a Product is Limited:

According to this concept, the product will die out over a period of time irrespective of the fact that the product had made tremendous progress during the post. Knowing this fact, management always try to improve its existing product or to develop a new product.

2) Estimation of Profits:

The quantum and rate of profits increase or decrease with the quantum of turn over. In introductory stage, profits are negligible, then they go up and after sometime they begin to fall and gradually they move to nil. Thus, the management can well predict the firm's profits in different stages of the life cycle of the product.

3) Marketing Programme:

Different policies, procedures and strategies are followed in the different stages of the life cycle of a product. So, management can prepare the marketing programmes accordingly and may get success.

Importance of Product Life Cycle also includes

• Help in promotional decision.
• Help in product control.
• Facilitates sales forecasting.

Product Related Policy Decision

Decisions taken by the producers on the given three aspects;

1) Product Item: A detailed description of a product in a list of a producer or seller is called product item.

2) Product Line: It means group of product, which are closely related to each other for Ex:- Lakme, Maybline, etc. In product line decision, the marketer has to make decision regarding the product line length which means the number of product in the product line.

3) Product Mix: It means the complete set of product line produced and bold by the company. Ex:- Nestle produces mill powder, maggie, ghee, etc.