1. Product Life Cycle & Marketing Strategy
Hitesh Gupta
26th Sep ‘13

2. •Product is anything which is of value & is
offered thro’ voluntary exchange
•A change in feature creates a new product
•Service : Set of activities, benefits or satisfaction offered for sale
» Intangible
» May not result in ownership
What is a product?

3. Goods and/or Services Are the Product

4. What is the demand for these products in 2013
compared to 1990?
» Fixed phone, land-line
» Cell phones
» Umbrella
» Video cassette player
» Diabetes Insulin injections
Demand for products
???

5. •New products meet needs better
» Maruti 800 v/s Premier Padmini
• Technology changes
» Video conference v/s air travel
• Substitutes replace a product
» Telegrams v/s SMS, SMS v/s Mobile Chat
• Population moves to the next level in Maslow’s NH
» Basic variant of a car to full loaded model
Why would demand change?

6. PLC Concept is Based on Four Premises
Products have a
limited life.
Product sales pass through
distinct stages, each with
different marketing
implications.
Profits from a product
vary at different stages
in the life cycle.
Products require different
strategies at different
life cycle stages.

7. Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
• Begins when the
company develops a
new-product idea
• Sales are zero
• Investment costs are
high
• Profits are negative
PLC Stages

8. Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
• Slow sales growth – cell
phones 15 yrs back, Hybrid
cars today, Blu-Ray
technology, HD TV
• Intensive
promotions, communications
• Price uncertainty
• Uncertain competition
reactions
• Uncertain consumer
responses
• Non-existent profits
• Negative cash flow
PLC Stages

9. Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
• Rapid sales growth – cell
phones today, internet, LCD
TV
• Market acceptance
• Price stabilization
• Features stabilization
• Profits start coming in
• Brand building starts
• Competition starts building
PLC Stages

10. Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
• Slow sales growth – Land
lines, 100cc
motorbikes, fountain pens
• Price
reductions, promotions
• Features changes /
reductions / new
• Profits go down
• Competitors introduce new
products
• Brand sustainability is
imperative in
communication
PLC Stages

11. Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
• Decline in sales – audio &
video cassette players,
pagers
• New products meet
satisfaction
• Profits erode
• Communication expenses
are stopped
PLC Stages

12. Varies with every product
» Can be controlled by marketing efforts
• Changes with technology introductions
» Inventions
» Disruptive innovations
PLC Duration

13. • Innovators –
» “first on the block” buyers
» Typically younger in age
» They enjoy taking risks with new
products
» They are mostly well informed
» Very small in numbers
» Tolerate failures
» They trigger the next level - Adopters
• Early adopters –
» These wait for initial purchases to
happen, product
reviews
» They enjoy novelty, higher incomes
youth, educated,
socially forward
» Opinion leaders
» They help spread the world
PLC and the Customer adoption process

14. •Majority -
» Skepticism, senior in
age, mixed levels of education
» They build the sales volumes
» Don’t like to take too much
risk
» Competitors enter the
market when these come in
» Careful buyers & choosers
•Laggards -
» They avoid change
» Rely on existing products
until it outgrows completely
» Form the last small section
» They don’t need to much ad
& communication

16. PLC Length and Shape
Sales Sales Sales
TimeTime Time
Style Fashion Fad

17. Introduction Growth Maturity Decline
Marketing
objectives
Create product
awareness &
trials
Gain market share,
create strong
positions
Defend market
share, create
profits
Reduce
expenses
milk brands
Product
strategy
Offer basic
Products
Eg. Vodafone
Offer product
extensions, build
service
differentiation
Diversify brands,
items & models
Eg. Blackberry
Phase out
weak
products
Price Charge cost
Plus
Penetration price
promotions, deals
Eg Dominos in India
Match pricing to
strong
competitors
Cut prices
Advertising &
Communications
Chosen market
segments are
addressed
Segment
awareness
Advertise
differentiation
Reduce levels
to
retain loyalists
Place Build Selective
Distribution
Eg. Hushpuppies
Build intensive
distribution
Build more
intensive
distribution
Go Selective:
Phase out
unprofitable
outlets
Marketing Strategies in the PLC

18. At the heart of a great brand is a great
product
Thank you