Product Life Cycle Essay

Product Life Cycle ( Plc )

Product Life Cycle (PLC)

Introduction:–

A new product passes through set of stages known as product life cycle. Product life cycle applies to both brand and category of products. Its time period vary from product to product. Modern product life cycles are becoming shorter and shorter as products in mature stages are being renewed by market segmentation and product differentiation.

About:–

Product life cycle comprises four stages:

a)Introduction stage

b)Growth stage

c)Maturity stage

d)Decline stage

A)Introduction stage

Product is introduced in the market with intention to build a clear identity and heavy promotion is done for maximum awareness. Before actual offering of the product to customers, product passes through...show more content... At some point in this rise a marked increase in consumer demand occurs and sales take off. The boom is on. This is the beginning of Stage 2–the market growth stage. At this point potential competitors who have been watching developments during Stage I jump into the fray. The first ones to get in are generally those with an exceptionally effective "used apple policy." Some enter the market with carbon–copies of the originator's product. Others make functional and design improvements. And at this point product and brand differentiation begin to develop. The ensuing fight for the consumer's patronage poses to the originating producer an entirely new set of problems. Instead of seeking ways of getting consumers to try the product, the originator now faces the more compelling problem of getting them to prefer his brand. This generally requires important changes in marketing strategies and methods. But the policies and tactics now adopted will be neither freely the sole choice of the originating producer, nor as experimental as they might have been during Stage I. The presence of competitors both dictates and limits what

can easily be tried–such as, for example, testing what is the best price level or the best channel of distribution. As the rate of consumer acceptance accelerates, it generally becomes increasingly

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I. INTRODUCTION

A review of literature in economics and marketing suggests that since Raymond Vernon published his article "International Investment and International Trade in the Product Cycle" in 1966,1 there has been a simultaneous development of literature pertaining to the 'product cycle' in marketing. There are differences between Vernon's concept of the product cycle and marketers' perception of the product life cycle. However, when one reviews publications in areas where these disciplines tend to overlap, particularly in international marketing and international business, both of these terms tend to fuse together and be used almost interchangeably.

While discussing Vernon's model, Louis T. Wells, Jr. states that "the model claims...show more content...

It offers innovation and economies of scale as predominant explanatory variables. Vernon hypothesized a circular pattern of trade composition that occurs between trading partners in different stages of economic growth. Unlike the product cycle with its macro orientation, the product life cycle concept in marketing theory is a micro level explanation of stages of the life cycle a product or service goes through in the context of its market life. Sales volume and profits become the critical micro variables in the product life cycle framework. In the introductory stage of a product's life, sales are typically slow and profits negative. In the growth stage, both sales and profits rise at a rapid rate. During maturity, sales volume may continue to rise at a declining rate and profit may stay high. In the decline state, both sales and profit decrease.1\ Sales and profits are the principal variables for marketing decisions. The product life cycle is essentially a tool for firms to design marketing mix strategies for different, states of the life span of a product or service. Vernon stresses the degree of standardization as evidence of maturation of the product. A mature product typically may become standardized across international markets. The yardstick for maturity in the product life cycle Get

Overview

The product can be defined as goods, services or both; in the other words it's anything that satisfies customer need. Each product has its own limited life, however it shares the same aspect and we define the period that the product goes through as the "Product life cycle".

The Product life cycle consist of four stages starting from introduction stage, growth stage, maturity stage and decline stage. At the introduction stage, the product is not popular and can't really make a lot of profit. Its marketing cost may be high in order to test a market and set up a distribution channel. At the growth stage, the product start making a profit, the sales increase rapidly with some cost on marketing especiallybrand building....show more content...

On the top of that, the ability to indicate which stage the product is in is important. Once the stage is recognized, the marketer can formulate the marketing objectives for that particular stage as well as develop a marketing strategy perhaps in advance. The great advantage of applying the right strategy allows the company to gain the highest profit for each stage and maintain the highest possible market share.

Are there any strengths or weaknesses?

Strengths – The product life cycle is considered as both straightforward and powerful model. By using the model as guidance, effective and timely marketing will take the product through each stage and can be planned in advance. The product life cycle can also be use to alert the marketer, when the product is in the stages of growth and maturity, to integrate extension strategies during this period to maintain the high profit level.

Weaknesses– It is hard to tell which stage the product is in, as there are constant short–term fluctuations due to external factors, consequently marketing actions could be taken too early or too late. By failing recognize the stage of product in the product life cycle model; it can cause business failure for especially a small business.

In conclusion, it is fair to say that the model can only be used to help identify the symptoms of each stage. Each product

Product Life Cycle A product is like a person. It is born, grows up, matures and then passes away. The product life cycle discusses the stages which a product has to go through since the day that is comes out to the day that it is taken off the shelf. However, the difference between a human dying and a product is that the product is killed by someone. Either the company or by competition. There are several products in the market that have been around forever and there are ones that don't make it very long. That is why the Product of Life Cycle comes in four stages. Stage 1 of Product life cycle – Introduction of the product. The stage 1 is where the product is brought out. A product launch is always tricky. There have been failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage depends on the product. Stage 2 of Product Life Cycle – Growth of the product Once the introductory phases are over, the product starts showing better returns on their investments. Your customers begin responding. There is better demand in the market and the product starts making money. Stage 3 of Product Life Cycle – Maturity stage of the product One of the problems associated with maturity stages in the Product of Life Cycle is the problem of duplication. Different companies will make it different ways and make for competition. Which can make one company more profits then another. Stage 4 of Product Life Cycle– Stage of

Product Life Cycle Of Pepsi

Product Life Cycle of Pepsi

There are five key stages of the product life cycle:

1) Pre–launch – no sales and profit are made because the product is still in development.

2) Introduction – initial sales are made to innovators, consumers who enjoy trying new products, but these are insufficient to recuperate development costs

3) Growth – sales being to increase rapidly as the product gains popularity among the early majority. It is at this stage that profits are first generated.

4) Maturity – this is the longest stage and generates the majority of a product's sales and profits from the late majority. To 'milk' the product for as much profit as possible, extension strategies are often implemented to pro–long the maturity stage.

5) Decline – eventually all products stop selling, such as VHS tapes. As expected, sales begin to decline until the product is no longer profitable. At each stage, marketers should adapt their marketing strategies to the external changes in the market place. Let's take a look at how PepsiCo have used the product life cycle to successful grow Pepsi into one of the most consumed drinks in the world.

Product Life Cycle of Pepsi:

1) Pre–launch – the 1890s

In 1898, pharmacist Caleb Bradham developed 'Brads Drink', a formula designed aid digestion. After strong interest from consumers in his pharmacy, Brad renames the drink 'Pepsi–Cola' and purchases the trademark 'Pep Cola' for $100. The origins of Pepsi are very similar to that of Lucozade, which was

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Product Life Cycle

A new product progresses through a sequence of changes from introduction to growth, maturity & decline. This sequence is known as the "Product Life–Cycle" & is associated with changes in the marketing situation, thus impacting the marketing strategy & the marketing mix.

Introduction Stage

In the introduction stage, the firm seeks to build product awareness & develop a market for a product. The impact on the marketing mix is as follows:

Product :– Branding & quality level is established & intellectual property protection such as patents & trademarks are obtained.

Pricing :– The pricing strategy maybe one of 'low penetration pricing' to build market share rapidly, or 'high skim pricing' to recover...show more content...

Pricing :– It maybe a bit lower than previous stages because of increased competition.

Distribution :– It becomes more extensive. Distributors maybe offered with incentives to encourage preference over competing products.

Promotion :– Greater emphasis on product differentiation & retaining existing consumer base.

Decline Stage

As sales decline, the firm has several options:–

Maintain the product, possibly rejuvenating it by adding new features & finding new uses.

Harvest the product; reduce costs & continue to offer it, possibly to a loyal niche segment.

Discontinue the product; liquidating the remaining inventory or by selling it to another firm that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected strategy. E.g. the product maybe unchanged if it is being harvested or liquidated. The price maybe maintained if the product is harvested, or drastically reduced if liquidated.

Some more extension strategies that extend the life of the product can be enumerated as follows:

Advertising: Try to gain a new audience or remind the current audience about your product.

Price Reduction: Reducing the price of your product to make it more attractive to consumers.

Adding value to current product. E.g. video messaging on mobile phones.

Add new products to same product line. E.g. new products with same brand name ("Line Extension") or new product with a Get more content

Product Life Cycle

Product Life Cycle

Introduction: This paper aims at analysing the usefulness of the Product Life Cycle (PLC) concept to the marketers. It will describe the different stages of the PLC concept and their respective implications on the marketing mix and the strategies which can be adopted during the different phases.

Every new product right from its entrance in the market till its elimination from the market goes through a certain sequence of stages known as Product Life Cycle. There are four stages popularly addressed by the product life cycle which are: Introduction, growth, maturity and decline recognized as distinct stages in the sales history of a product (Kotler, 1984).[pic]

Different Stages of Product Life Cycle

Each stage of...show more content...

The second is in terms of manufacturers attempting to secure as many distribution outlet possibilities as possible, as the product has now lost its innovative appeal. In distribution terms they move from exclusive, then to selective and finally to intensive distribution. The philosophy of the latter is that maximum exposure at the point of sale is probably as important as brand awareness.

o Promotion: During this phase promotion tends to change from one of creating awareness to one of attempting to create an identifiable brand. Promotional expenditure is probably still quite high. Competitors will know the perceived weaknesses of your product, so they can emphasize the strength of theirs. Although it might seem that being in the market first is a good policy, it is also a high risk policy. Unless the company is large enough to sustain a costly failure at this stage, or has other products to fall back upon, then such a policy is very high risk indeed.

Maturity and saturation are dealt with together, because the 'maturity' phase is the phase where the product's sales level off to a gradual peak over a longer period (often years or decades). The 'saturation' phase is from its peak, gradually downwards to the phase where sales start to decelerate towards the 'decline' phase. In fact, many marketing authors miss out the 'saturation' phase altogether and class all of this phase as

Product Life Cycle

MARKETING THROUGH THE PRODUCT LIFE CYCLE

A company's positioning and differentiation strategy must change as the product, market and competitors change over time. Due to this, a product is assumed to follow the concept of the product life cycle (PLC). Kotler (2000) say that a product has a life cycle is to assert four things: Products have a limited life; product sales pass through distinct stages with different challenges, opportunities, and problems for the seller; profits rise and fall at different stages of the product life cycle; and products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage. This PLC curve is typically divided into four stages:

i.Introduction: A period...show more content...

Maturity Stage

At some point, the rate of sales growth will slow, and the product will enter a stage of relative maturity such as calling services by Safaricom Company. This stage normally lasts longer than the previous stages, and poses formidable challenges to marketing management. Most products are in the maturity stage of the life cycle, and most marketing managers cope with the problem of marketing the mature product such as: stiff competition, technology upgrade e.t.c.

Three strategies to adopt in overcoming the challenges for the maturity stage are market modification, product modification, and marketing–mix modification:

i.Market modification. The company might try to expand the market for its mature brand by working to expand the number of brand users. This is accomplished by: converting nonusers; entering new market segments; or winning competitors' customers (by lowering calling charges and convincing customers that they are the better option). Volume can also be increased by convincing current brand users to increase their usage of the brand. ii. Product modification. Managers try to stimulate sales by modifying the product's characteristics through quality improvement, feature improvement, or style improvement. Safaricom introducing different tariffs to suit its customers' needs. iii. Marketing–mix modification. Product managers can try to stimulate sales by modifying other marketing–mix

Life Cycles of Products

The definition of a product is "anything that is capable of satisfying customer needs", this includes both physical products, like cars, cell phones, machines, as well as services like banking, and insurance. Businesses manage and modify their products over time so that they constantly meet the changing demands of their customers, the methods used to manage a number of brands and product lines is known as Portfolio Managing. The different stages through which these individual products develop in time in terms of the sales they generate is known as Product Life Cycle. A product life cycle...show more content... At this point, the sales generated are usually low and the profits are typically low or none at all. Due to the fact that the company is paying a lot for advertising and brand building, the customer pays a high price for the product. This stage is also characterized by high distribution costs. At this point of time the product offered is still in its most basic form. A good example of a product in this stage currently is the new DVD Writer for computers, which enables users to store up to five times more information as compared to a compact disc. Currently, they are extremely expensive, the speeds at which they can be "written" at are relatively slow compared to the traditional compact disc. There is also a heavy advertising campaign by manufacturers in all computer stores. The second stage is known as the Growth Stage. This stage is mainly characterized, for successful products, by a tremendous increase in sales. New customers are added while existing customers are making repeated purchases. By now however, competitors have introduced similar products, with a large number of sales and competitors the price is lowered to make the product more attractive for potential buyers. This is one of the tools of a system that is used in this stage known as Product Differentiation, where the marketing strategy is implemented that seeks to create a difference in

Product/ Industry Life Cycle

Industry awareness: The life cycle of the Contract Research Organizations (CROs) varies and is dependent on the clinical development outsourcing market. Based on the current market trends and research insights, CROs have experienced vigorous business growth within the past 5 years. This growth rate is projected to propel industry revenue from 2016 to 2021 due to a very active pipeline of potential blockbuster drugs. The increasing disease prevalence and higher medical needs is driving the biotechnical and pharmaceutical industry to produce and test new investigational products. CROs play an integral role in providing the services for this developmental process. It is forecasted that 75% of these clinical trials will be performed by CROs by the year 2021.

Growth: The industry is forcibly pressured to develop safe and effective products, but at affordable prices. There is an extremely inflated expense associated with conducting clinical trials, which is a big concern for the industry. Outsourcing services to CROs that can fulfill their specific needs at a lower cost enables the biotechnical and pharmaceutical companies to focus on the core of their organization. Premier Research and other small to mid–sized CROs that have a specific niche are acquired for their functional services. As the industry's investigational pipelines continue to grow, the market growth for CROs will continue to skyrocket as well. This market growth is also creating an

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Product Life Cycle Essays

2. Life Cycle Inventory: Introduction: Every new product or development made by man has an impact on environment. Growing environmental concerns has made it necessary to quantitatively study these factors. Life cycle assessment (LCA) is one such tool devised for calculating the overall environmental impact of a product or service. It includes defining aim and scope of assessment, inventory analysis, impact assessment and deriving conclusions. Life cycle inventory (LCI) is a part of LCA and involves direct collection of input output data from the system. Quantities like material/resource consumed, energy utilised fall under inputs while energy and by–products released are considered outputs. Life cycle impact analysis (LCIA) consists of...show more content...

Product Life Cycle

1. Introduction

It has been well established that Product Life Cycle (PLC) concept has a significant impact upon business strategy and corporate performance. Since the term was first used by Levitt (1965 ) in an Harvard Business Review article "Exploit the Product Life Cycle" the concept has been widely accepted and applied by marketing practitioners all over the world. The product life cycle concept is one of the most quoted and most frequently taught elements of marketing theory. According to Mercer (1993: 269) the influence of the product life cycle can be seen in other theories, from new product development, positioning & differentiation and portfolio analysis.

Since its adoption by marketing, the product life cycle (PLC) has...show more content... This value addition can be through quality accredited globally recognized training programmes, training needs analysis at no cost or any other consultancy services required by the client. Further the clients or companies are not able to differentiate BIRD's training solutions or products from others specifically on the basis of quality.

In other words, 'BIRD' needs to reexamine and reassess the following issues related to its training programmes –

1. It needs to critically analyze its current positioning & differentiating strategies for each of its broad training programmes or categories specifically which if they are in maturity stage. This should also to be done for the company as whole that is what brand image BIRD has and how do clients perceive it.

2 based on the analysis it needs to explore various repositioning & differentiation strategies for its range of training programmes to make it more effective in the long run.

3. It needs to establish whether the training market is mature or BIRD's products are mature.

2.3 Understanding Positioning & Differentiation

Positioning is the aspect of the product or brand actively communicated to the target audience, specifically, its competitive advantage, values and imagery. It is strongly related to the perception and image of the product. When devising a positioning strategy for a product, marketers must establish a unique and distinctive image of that product in the mind

Product Life Cycle

Product Life Cycle

Marketing Management D01

April 7, 2013

Abstract

In marketing, there is a tool that is very useful to marketing strategy development. This tool is known as the product life cycle. The product life cycle goes through four stages before it is complete or starts over again. The life cycle starts with the introduction of a product, and then the product begins to grow as it is recognized by more markets and is delivered to through more channels. After the growth period, a product reaches maturity where there has competitors and sales do not match up with profit. This is the time where marketing strategists reevaluate and try to remarket the product. The last stage is the decline. This is where the seller decides to cut...show more content...

This is often the stage where a firm has to remarket the product or brand in order to keep it alive and keep profits relative to sales. Eventually, there is a decline in the sales (Peter & Donnelly). When the product enters into the stage of decline some big decisions must be made in order to keep profits relative to sales. According to the text there are five questions that the seller must decide. "The seller must decide to (1) drop the product, (2) alter the product, (3) seek new uses for the product, (4) seek new markets, or (5) continue with more of the same" (Peter & Donnelly). It is important to decide these things in order to keep the firm profitable. The costs need to be cut while still maintaining quality to ensure brand loyalty. Then the product should be evaluated to find a way to market it in yet another way and renew its life. During decline, the price of the product is incredibly low to sell of remaining merchandise or it might be high to sell to a certain kind of market called a niche. The channels are once again limited and promotion is minimal to cut spending. Decline is the end of the product life cycle. The product life cycle is primarily useful in that it forces management to have long term views about a marketing planning. When looking at the stages of the life cycle it ensures that the different aspects of marketing are

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Product Life Cycle Name GBM/381 December 5, 2011 Rolando Sanchez Product Life Cycle "The international product life cycle (PLC) theory of trade states that the location of production of certain kinds of products shifts as they go through their life cycles, which consist of four stages–introduction, growth, maturity, and decline." There are many ins and outs when a company is putting a product into production and distribution. You must be able to assess the the impact that it is going to gain for your company, for instance when Blackberry makes new phones they have to decide what is going to be a draw for consumers from the operating system, the abilities that come with the phone from wifi connectivity,...show more content...

With the financial backing the company is going to grow and with the company growing around %24 from the previous year their products will continue to have a great international impact. "Trading groups, whether bilateral or regional, are an important influence on MNEs' strategies. Such groups can define the size of the regional market and the rules under which companies must operate. Companies in the initial stages of foreign expansion must be aware of the regional economic groups that encompass countries with good manufacturing locations or market opportunities." For instance when you have a company that assesses the needs of their product in a foreign market, there is cost associated with the export of their product and with the agreements that the company has that is protected by trade agreements the company will save monies in the long run and withstand the impact of their product being sold in other markets, by sometimes having that price reduction of tax, shipping cost when building that relationship, to progress the growth in their company and in both markets of goods exported and sold. "One of the factors behind the success of the brand in Jamaica, Stewart believes, is its affordability despite it being a Get more content

The Product Life Cycle

Every product have a beginning and have an end which means they have a life span. The stages through which individual products develop by time is called 'Product Life cycle'. The Product life cycle has four major stage which are:

ВЁ Introduction Stage

ВЁ Growth Stage

ВЁ Maturity Stage

ВЁ Decline Stage

Products experience each of these stages at different times and at one point in time a firm may also have a range of different products at different stages in their life cycles. The length of the product life cycle depends on technology and new inventions. Since these are rapidly changing the life cycle of a product is getting shorter. For example from CD players where one had to buy CD's today one...show more content...

This suite most for the perishable goods example new range of food stuffs. In this level frequent modification is still undertaken due to certain problems discovered after its launching.

After consumers see that a hi–fi is worthed and suites them the product can now be classified under the Growth Stage where sales start to increase quickly and more distribution channels are establish. In creating a hi–fi system surely required a lot of research and development and tones of money where spent to pay experts on electronics to make this product. In the Introduction Stage it is not possible for the firm to cover these expenses but in the Growth Stage, the breakeven is reached and the firm start earning profits. Thus at this stage competitors will be encouraged by the profits being made and so they enter the market resulting into price reduction. New entries will result in product variety where some will try to improve on the product such as increasing the sound and providing better styles and colours to compliment the room it is put in. Others try

to refine their offerings to a better job of appealing to some target markets, for example to attract more consumers of different age group a retailer can make an offer that with each hi–fi system purchase they will give 5 Cd's free that range from 80's music for the grown ups, classical and country music for the eldery till today's modern music

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Product Life Cycle 1. Provide an example of a product that is at the introduction stage of the product life cycle. Introduction Stage – This stage of the cycle sees the manufacturer conceptualizing its products and submitting it to the market. This, being done with the common business understanding of meeting the demands of the consumer's requirements, calls for the manufacturer to devise products that are of high quality to enable it to equally compete in the existing market (Grantham, 1997). Likewise, in as much as the product has to be of equal standards to those already in the market, the manufacturer have to ensure that its price range is equally affordable if not cheaper than the products in the market. Done with the intention of enabling an organization realize profit in the highest level possible, the manufacturer has to keep in mind that upon its inception into the market, the product could be the most expensive to be launched (Hedden, 1997). The challenge associated with introduction does not guarantee an organization a market position and as such, its market might be in its minimal, translating to the fact that its sales will be low upon introduction and increase as the product gets familiarity with consumers in the market (Kumar, Sameer, and William, 2005). An example of such a product is the 3D television sets. 2. Provide an example of a product that is at the growth stage of the product life cycle.

Growth Stage – This stage comes after the manufacturer has

Product Life Cycle Of Nike

The Product Life Cycle Product life cycle is divided into many stages by the revenue generated by the product. It is applied to brands and products and its duration varies from short months till centuries. The product progress (product development) through the whole cycle changes in its marketing mix which adjust challenges and opportunities. Introduction stage: Any product after its introduction its sales may go low ad customers don't know its benefits. Some firms use advertising in this stage in order to make customers aware of the product. Firms also have additional costs in introductory stage due to initial distribution of product The primary goal in introductory stage is to build demand for the product class. As an example of marketing mix implications Product one or few products relatively undifferentiated Price which is high assuming skim pricing strategy for a higher profit margin Distribution which is scattered as firm commences implementation of distribution plan Promotion which is aimed at building brand awareness Growth stage It's the period of the rapid revenue growth as sales increases as more customers...show more content...

One of its qualities is embedded in Nike's share. Questionably, Nike is the main sports attire and Footwear Company and the main brand over the globe. Along these lines, it can effectively advertise the shoes in its current business sector. Nike too has a set up worldwide dissemination channel (chain), solid business sector methodology, a pioneer in innovation and configuration and it is accepted to be a brand that esteem quality that could help in circulating these tennis shoes. Besides, the organization has a solid money related status, basic in improving advancement and improvement of these tennis shoes. In any case, its significant shortcoming is that it is exceedingly valued generally as different results of Nike

Product Life Cycle Stages

THE PRODUCT LIFE CYCLE

A product's life cycle (PLC) can be divided into several stages characterized by the revenue generated by the product. The life cycle concept may apply to a brand or to a category of product. Its duration may be as short as a few months for a fad item or a century or more for product categories such as the gasoline–powered automobile. Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. As the product progresses through its life cycle, changes in the marketing mix usually are required in order to adjust to the evolving challenges and opportunities.

The four stages of product life cycle are:

1.Introduction stage

2.Growth stage...show more content...

The competing products may be very similar at this point, increasing the difficulty of differentiating the product. The firm places effort into encouraging competitors' customers to switch, increasing usage per customer, and converting non–users into customers. Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products. During the maturity stage, the primary goal is to maintain market share and extend the product life cycle. Marketing mix decisions may include: Product – Modifications are made and features are added in order to differentiate the product from competing products that may have been introduced.

Price – Possible price reductions in response to competition while avoiding a price war.

Distribution – New distribution channels and incentives to resellers in order to avoid losing shelf space.

Promotion – Emphasis on differentiation and building of brand loyalty. Incentives to get competitors' customers to switch. DECLINE STAGE

Eventually sales begin to decline as the market becomes saturated, the product becomes technologically obsolete, or customer tastes change. If the product has developed brand loyalty, the profitability may be maintained longer. Unit costs may increase with the declining production volumes and eventually no more profit can be made.

During the decline phase, the firm generally has three options: Maintain the product in hopes

What is the product life cycle?

The PLC indicates that products have four things in common: (1) they have a limited lifespan; (2) their sales pass through a number of distinct stages, each of which has different characteristics, challenges, and opportunities; (3) their profits are not static but increase and decrease through these stages; and (4) the financial, human resource, manufacturing, marketing and purchasing strategies that products require at each stage in the life cycle varies (Kotler and Keller, 2006). Whilst there is a common pattern to a product's life cycle, which is bell–shaped in nature, this pattern does vary depending on the specific characteristics of a given product. These life cycle patterns are illustrated and...show more content... Whilst profits will gradually improve during this stage, it may take until near the completion of the introductory stage in the PLC before the company witnesses positive profitability. The reason for such low profitability during this stage is not so much the limited success of the product В– measured in terms of low, albeit growing, sales В– but the high costs of production and promotion that are required to try to develop customer awareness. Depending on the nature of the product, the firm many need to invest in building inventories or acquiring fixed assets such as plant and machinery. Whilst this stage in the process can take a long time and consume considerable resources, firms must not be tempted to try to obtain early profitability at the expense of long–term product viability. For example, introducing a new product at a low price may encourage a lot of consumers to make an immediate purchase, but the firm not only sacrifices long–term sales because too many people have bought the product early on but also may considerably reduce its margins, making it more difficult and time consuming before the product first becomes profitable and hits its break–even level. As such, firms must make careful choices over their marketing strategies; in particular, their pricing, promotional and placement decisions (Porter, 1980; 1985; Kotler et

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Product Life Cycle

The Product Life Cycle

Product life cycle is made based on the biological life cycle. Most projects goes through similar stages on the path from origin to completion. Johnson (2012) stated that product life cycle (PLC) is a trend whereby a brand new and original product become out–of–date and gradually obsolete (Johnson, 2012). There are four major phases in the project life cycle as shown in Figure 1 (refer to Appendix). These major phases are introduction stage, growth stage, maturity stage and decline stage.

The product life cycle starts with the introduction stage. During this stage, marketing strategies change from time to time to meet market demand in relation to its competition, pricing, distribution, promotion and market...show more content... 104). Besides that, at this growth stage also, competition automatically begins in the establishing market. This is because when the sales of one laptop brand surplus the expected demands, it alerts the other competitiors' attention. For that reason, they are pulled into the business and usually appeared with the same products (The product life cycle, n.d.). When competitors such as HP, Toshiba, Dell, Sony, Lenovo and so forth start to enter the market place, price competition may occur. Meanwhile, there may be frequent promotional costs in order to attract more consumers to buy their products and persuade them that the company's product is better than others. Taking Asus laptop as example, the company often distinguish their laptop, make sure they are incomparable from the competitors ones and always perform at maximum efficiency. Komninos (2002) stated that in order to prevent the competitors from gaining market share by copying or offering the same goods, repeated modification process of the product is needed. Next, the company can stringent the rules and regulations that must be obeyed. For instance, licenses, copyrights, product complexity and low availability of product components to control the infringement of copyright. Finally, heavy promotions such as trade shows, sales seminars and press releases may