The concept of the product life cycle(PLC)represents the time between when a product is launched to the market and when it is taken off the shelves. Management and marketing professionals utilize this notion to determine when it is suitable to boost advertising, lower prices, expand into new markets, or change the packaging design. Product life cycle management is the practice of developing strategies to constantly support and sustain a product.
A product’s lifecycle is divided into four phases: introduction stage, growth stage, maturity stage, and decline stage. Sales are often low and slow when a product first launches. Because the product is new and untested, the corporate profits are minimal. Customers may be hesitant or being unable to evaluate the product during the introduction stage, requiring extensive marketing efforts. Because production capacity is not maximized, economies of scale provide no benefit.
The product will enter the growth stage if it continues to grow and fulfill market needs. From the take-off point, sales revenue normally climbs rapidly throughout the growth stage. When sales revenues outpace costs and production approaches capacity, economies of scale are attained. The market eventually reaches capacity, and product sales growth slows down. As enterprises compete for customers, price undercutting and greater advertising efforts are prevalent at the maturity stage.
The most challenging problem at the maturity stage is to retain profitability while preventing sales from dropping. At this stage, maintaining client brand loyalty is essential. The product’s sales and profitability begin to diminish in the decline stage. This is mostly due to the introduction of new or substitute items on the market that better meet customer needs than the present offering.