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Product Life Cycle – Managing Your Product To Maximize Success
Every product in the market meets different opportunities and challenges. Therefore, it is seen that they do not have a stable and consistent performance. As a result, sales and profit of the product changes.
This is because every product undergoes different stages, which is called product life cycle (PLC). During each phase; the product undergoes various challenges in order to survive and remain in the market.
Therefore, in order to maximize the profit from their products, it is essential for the marketer to study the various stages of the product life cycle in detail, so that he can use the various marketing tools accordingly and assist the product to avail the opportunity to its best and cross the hurdles, in each of its PLC stage and thus become a successful product.
Basically there are 4-stages of product life:
- Introduction phase,
- Growth phase,
- Maturity phase,
- Saturation and decline phase.
Introduction phase : the new product is launched in the market.So,the major objective of the marketers is to create awareness about the new product amongst its target customers . A demand has to be created and therefore it is necessary to attract the potential customers (early adopters).
Hence,the marketers promote products through heavy promotions and advertisements. Therefore,the expenses in this phase is quite high as the sales is quite low. Depending upon the nature of product,pricing is done. For high tech products, marketers set up premium price whereas for maximum penetration of product marketers, prefer setting low costs.
Growth phase : the sales volume of the product increases tremendously and therefore there is rise in profit. This helps to decrease the expenditure cost. There is an awareness among the customers about the new product existence in the market .
So,the marketers focus on other segments and therefore, try to expand their target market through various promotional activities. Competition begins to increase with the already established players in the market and hence, the marketers keep an eye on all the aspects of its old as well as new competitors. Generally because of increased competition ,there is decrease in the product price.
Maturity phase : the sales volume increases and reaches its peak. So,there is increase in volume of production leading to decrease in the production cost.There is an increase in the competition and new competitors too enter the market.
Since the product in this phase has reached the maturity stage in terms of its sales and there are also new competitors therefore it is necessary to for the marketers to refresh its product and introduce new features to increase its market share. They promote their product by differentiating it from its competitors.
Decline phase : the sales volume either decreases or remains stable and therefore the profitability.The incurred costs become counter –optimal. Therefore,its better for the marketers to either relaunch the product with changes, keeping in mind the consumers needs or continue with the product till it has its loyal customers and then slowly close the product.