Forgot the product life concept

SUBMITTED BY:- Sourabh Meena Arshdeep Singh

PRODUCT LIFE CYCLE

• INTRODUCTION• The International product life cycle, developed by the economist Raymond Vernon in 1966.

• Each product has a certain life cycle that begins with its development and ends with its decline within four stages “introduction”, “growth”, “maturity” and “decline”.

• The Product Life Cycle (PLC) is based upon the biological life cycle.

Ideal Shape Of PLC

Stages Of PLCSTAGES OF PLC

Introduction Stage –oCould be the most expensive.

oMarket Share is small.

oHigh Cost of launch .

o No profit generally.

Growth Stage –

oStrong growth in sales and profits.

oProfit will increase.

oPromotional activity to maximize the potential of this growth stage.

Maturity Stage –

oThe product is established

oMaintain the market share.

oMost competitive time for most products.

oNeed to do improvement and modifications.

Decline Stage – oMarket share start to shrink, oNeeds innovation. oBrand loyalty may give profit longer.

oPrice reduction and Advertisement.

•

The product life cycle myth• It is a myth that every product has to go through each of the stages of the product life cycle.

• The duration depends on demand, production costs and revenues.

• Some products move through the life cycle much faster than others.

• Although decline can be avoided by reinventing elements of the product.

• No Life cycles for Brands.

Blunders due to PLC

• Management believes Products in dying stage.

• PLC is Dependent variable.

• Maturities period may not be Extended.

THEORY CHALLENGED• Many products have been around for generations, and show no signs of decline

or death.• Their survival is a function of keen attention to brand identity and equity. • Companies that nurture consumers' impressions of the value the product delivers

year after year can stave off indefinitely its demise..

Products That Defy the Theory• American Express• Budweiser• Camel• Coca-Cola• Western Union • Wells-Fargo • Brands that have died can be reincarnated, though perhaps in more limited

distribution.

Customer Equity

• Much more predictive method.• Customer equity is the lifetime value of all a brand's customers. • The more equity relative to its competitors, the longer it is likely to live.• If a brand has weak equity, marketing managers know it needs serious marketing

attention to make it healthy again.