Presentation on Product Life Cycle

Presented by, Baldeep Kaur

What is Product Life Cycle

Product life cycle includes the stages through which a product or its category bypass. It is the product aging process right from its introduction to the obsolescence. According to Prof. Philip Kotler, It is an attempt to recognise distinct stages in the sales history of the product. According to Mr. Kollet, It is generalised model of sales and profits trends for a product class or category over a period of time

Stages of Product life cycle

Stages of Product Life Cycle

Introduction Stage:- It is characterised by
Low and slow sales:- Basic reasons for this are:-Delays in expansion of production capacity. -Consumer resistance. -Delay in making product available to customers due to lack of retail outlets. Highest promotional expenses:- It may be due to -Informing present customers of the new product. -Inducing the trial of product. -Screening distribution network.

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Highest product prices:-It is because of
-Lower output and sales observing fixed costs. -Higher margin to support higher doses of promotional expenses. -Very few competitors. -Technological problems might not have been matered fully.

Growth Stage:- It is characterised by

Sales rise faster: Sales start climbing up at faster

because of:-Killing the consumer resistance to the product. -The distribution network-retail outlets is built to the needs. - Production facilities are streamlined to meet the fast moving sales.
Product improvements:

-As the Competitors may reduce the product prices,it makes the originator to further improve the product.

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Higher promotional expenses: It includes

-Promotional strategy changes at this stage -Advertising moves towards brand identification. -Special offers,concession are given to dealers & stockists to push a particular brand.

Maturity stage:- Features of this stage are:-

Sales increasing at decreasing rate:- It has following extension strategies:-Development of new product. -Development of new uses. -Development of new frequent use. -Development of style change. Normal promotional expenses:- It includes:-The promotional expenses reach a normal ratio to sales. - Efforts are made to rationalise the existing budget.

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Uniform and lower prices:- It includes -The prices charged just to cover special cost in addition to the usual manufacturing expenses. - Prices charged by producers are quite lower. -Vitality of high prices fade. -Advantage of low margin.

Decline stage :- Its features are: Rapid fall in sales:-People are interested in buying something new. -Decrease in sales which induces firms to close down. Further fall in prices:-Rapid reduction in sales creates a fear. -There would be new kind of competitors to have enlarged shares in such a decline stage. No promotional expenses:-Distribution channel is reduced to the minimum with thorough rationalisation.