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A look at the product life cycle in product development

In order to cover all the effort and risk that went into launching a product, the company wants to earn a decent profit. The company must be aware that the product will not sell forever: Definition of Product Life Cycle PLC Before discussing the product life cycle stages, it is wise to explain what the product life cycle actually is. When the company finds and develops a new product idea, product development starts.

Sales slowly grow as the product is introduced in the market. Profits are still non-existent, because the heavy expenses of the product introduction overweigh sales.

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The growth stage is a period of rapid market acceptance and increasing profits. In the maturity stage, sales growth slows down because the product has achieved acceptance by most potential buyers.

Profits level off or decline because marketing outlays need to be increased to defend the product against competition. Finally, sales fall off and profits drop. While some products are introduced and die quickly afterwards, others stay in the mature stage for a very long time.

Product Life Cycle Stages (PLC) – Managing the Product Life Cycle

Some are cycled back into the growth stage after reaching the decline stage through strong promotion or repositioning. In fact, a well-managed brand could live forever if wise strategies are applied. Examples include Coca-Cola, Gillette, American Express, which still live on after more than 100 years. Product class, form or brand in the Product Life Cycle Stages Not only single products can go through the product life cycle stages.

Indeed, the PLC concept can also describe a product class for instance petrol-powered carsa product form e.

Challenges of the Growth Stage

In each case, the PLC concept applies differently. While product classes have the longest life cycles, staying in the maturity stage for a long time, product forms tend to have the standard PLC shape. Their product life cycles are somewhat special. A style is a basic and distinctive mode of expression.

New Product Development Stages

For instance, styles appear in homes e. A style may last for generations, but usually passes in and out of vogue. A fashion is a currently popular or accepted style in a certain field.

Fashions tend to grow slowly and remain popular for a while, before declining slowly. Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. A fad may be part of an otherwise normal product life cycle, passing through the product life cycle stages.

  1. To begin Market Research and Competitive Analysis should be carried out, to get an understanding of the market, and the key players in them. There are several channels to advertise your product.
  2. The second pricing strategy is a skimming strategy. After a period of an ongoing increase in sales, eventually your share of the market will stabilize.
  3. When the product is brought into the market.

But at a certain point, sales raise unexpectedly, but drop afterwards equally quickly. When used carefully, the PLC concept can be a great help in developing goods marketing strategies for the different product life cycle stages. However, using the PLC concept for forecasting product performance or developing marketing strategies brings some practical problems.

Product development: Product Life Cycle, Death Valley Curve, Marginal Utility

For instance, it is difficult to forecast the sales level at each of the product life cycle stages, as well as the length of each stage and the overall shape of the PLC curve. Also, the marketing strategy is both the cause and the result of the product life cycle.

The idea behind the PLC concept is that companies must continually innovate. In order to grow, it must develop a steady stream of new products that offer new value to customers. July 13th, 2015 by Maximilian Claessens.