Product Life Cycle - Chapter 6

Chapter 6Product Life-Cycle

StrategiesPrepared by:

Nor Izzuddin Bin NorrahmanLecturer of Management, Banking & Islamic Finance

Astin College

Introduction…

• After launching the new product,management wants the product to enjoy along happy life.

• It will not sell forever, but the company wantto earn a decent profit to cover the risk andthe effort that they went into when theylaunched it.

• Every product has its own life-cycle althoughthe exact shape and length is not known inadvance.

Product Life Cycle (PLC)

Product Development

• Product development begins when the company finds and develops a new-products idea.

• During product development, sales are ZERO and the company’s investment costs mount.

• Income = 0

• Cost >

Introduction Stage

• Introduction is a period of slow sales growth as the product is introduced in the market.

• Profits are non-existent in this stage because of the heavy expenses of product introduction.

• Income = Costs

Growth Stage

• Growth is a period of rapid market acceptance and increasing profits.

• Income > Costs

Maturity Stage

• Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers.

• Profit level off or decline because of increased marketing outlays to defend the product against competition.

Decline Stage

• Decline is the period when sales fall off and profits drop.

• Sale <

• Income <

• Not all product follow this product life-cycle.

• Some products are introduced and die quickly, others stay in the mature stage for a long, long, long, long, long time.

• Some enter the decline stage and are then cycled back into growth stage through strong promotion or repositioning.

The PLC concept can

be applied to what are known as

Styles

FashionsFads

Styles

• Is a basic distinctive mode of expression.

• Examples: House, clothes, art.

• Once a style is invented, it may last for generations, passing in and out of the vogue.

• A style has a cycle showing several periods of renewed interest.

Fashions

• A fashion is a currently accepted or popular style in a given field.

• Example:?

• Fashion tends to grow slowly, remain popular for a while, then decline slowly.

Fads

• Fads are fashions that ENTER quickly, are adopted with great zeal, peak early, and decline very quickly.

• They last only a short time and tend to attract only limited following.

• Examples?

PLC Characteristics

PLC Strategies

The End…question?