Marketing Knowledge: Product Life Cycle (PLC) and Stages in Product Life Cycle

Production Life Cycle (PLC) and Stages in Product Life Cycle

Product Life Cycle (PLC):

The Product Life Cycle (PLC) is the life span of the product from the stage of product development to testing, branding, promotion and marketing. For some products this also involves the stage of decline and perhaps regeneration.

Characteristics of Product Life Cycle:

The life cycle of each product begins with its introduction in the market and passes through the phases of market development, maturity, becomes leader and ultimately declines. The product production speed of movement through various stages of life cycle, cannot be same for all kind of products. With the decrease in profits in the maturity stage, changes such as research and development, production pattern, marketing and financial control activities, etc become essential.

Stages in Product Life Cycle:

Stage 1:
Market Introduction: In this stage, some innovative products may be launched. Innovation means product designing, new ideas and creativity. This stage is most expensive for companies. The cost for products like research, development, testing and marketing is high.

Stage 2:
Market Growth: This stage is typically characterised by a strong growth in sales and profits. As the company can start to benefit from economies of scale in production, the overall profit margins will increase. Price stabilises or falls slightly, depending on how fast demand increases.

Stage 3:
Market Maturity: In this stage sales will continue grow early of maturity, but at a lower rate than expected growth phase. At this time sales reaches the peak. This period may stands for extended of time. This maturity phase of the life cycle is longest stage for most products.

Stage 4:
Market Saturation:  In this stage, the amount of product provided in a market has been maximised in the current state of market place and selling price has been constant. At the point of saturation, further growth can only be achieved through product improvements, market share gains or a rise in overall consumer demand.

Stage 5:
Market Decline: This is the last stage of Product Life Cycle (PLC). At this stage, there is  a down turn in the market. Profit margins touch a low level, competition becomes severe and customers start using newer and better products.