Everything you need to know about product life cycle. Life cycle of a product is called Product Life Cycle (PLC). It is related to the different phases of a product i.e., since its birth to death.

An adage ‘Nothing is Permanent’ is commonly applicable to all.When a product is newly introduced in the market, it should one day meet its own end.

Entry and Exit are the two extreme, inevitable ends of a product. The product life cycle concept indicates that the product is born or introduced, grows, attains maturity and the point of saturation in that market and then sooner or later it is bound to enter its declining stage, i.e., decay in its sales (history). The product life cycle should be preferably termed as product market life cycle as it is related to a given particular market.

Learn about:-


1. Definition of Product Life Cycle 2. Concept of Product Life Cycle 3. Characteristics 4. Phases 5. Significance 6. Types 7. Stages 8. Factors Affecting 9. Relevance 10. Strategies 11. Importance of Study 12. Uses 13. Irregularity 14. Experience Curve 15. Advantages 16. Limitations.

What is Product Life Cycle: Definition, Concept, Characteristics, Phases, Stages, Features, Uses, Advantages and Disadvantages


  1. Definition of Product Life Cycle
  2. Concept of Product Life Cycle
  3. Characteristics of Product Life Cycle
  4. Phases of Product Life Cycle
  5. Significance of Product Life Cycle
  6. Types of Product Life Cycle
  7. Stages of Product Life Cycle
  8. Factors Affecting Product Life Cycle in International Market
  9. Relevance of Product Life Cycle
  10. Strategies in Product Life Cycle
  11. Importance of the Study of Product Life Cycle
  12. Uses of Product life Cycle
  13. Irregularity of Product Life Cycle
  14. Experience Curve in Product Life Cycle
  15. Advantages of Product life Cycle
  16. Limitations of Product life Cycle

What is Product Life Cycle – Definition by Eminent Authors: Philip Kotler, Mr. Kollat D.T, Mr. Black Well R. D and Robenson J.F

Life cycle of a product is called Product Life Cycle (PLC). It is related to the different phases of a product i.e., since its birth to death. An adage ‘Nothing is Permanent’ is commonly applicable to all. As scientist proclaim that matter can neither be created nor destroyed but only changes the form. Similarly, when a product is newly introduced in the market, it should one day meet its own end. Entry and Exit are the two extreme, inevitable ends of a product.

Every product has cyclical Life style i.e., product life cycle, which is the most commonly used concept in the marketing field. Various marketing thinkers C.R. Wassen, B. Carty, M. Chevelier, D.J. Luck, D.T. Kollate, R.D. Blackwell have contributed heavily for the identification of stages involved in launching of a product and various phases of product life cycle.


This is a fact of existence of a product. The period between the stages may vary between two products, two markets, in different conditions.

PLC defined –

Philip Kotler – “The product life cycle portrays distinct stages in the sales history of product. Corresponding to these stages, there are distinct opportunities and problems with respect to marketing strategy and project potential. By identifying the stage that a product is in or may be headed towards, companies can formulate better marketing plans.”

In others words of Mr. Kollat D.t ,Mr. Black well R.D. and Robenson J.F. – It is a “generalised model of sales and profit trends for a product class or category over a period of time”.


The above opinions can be summarized as:

i. Product has a life history, cycle with five stages viz.; Product development, Introduction, Growth, Maturity, Saturation, Decline.

ii. Sales volume and profits / losses have a definite relation over different phases.

iii. Marketing strategies should be framed right to the tune of stages.


iv. The period of different stages vary to each product.

v. Unless functional approach is adopted, product may meet unexpected end without completing the whole life cycle.

vi. All products need not necessarily cross all stages, in all the market segments.

The PLC of a product is also compared to ‘Aging Process’ which has definite phases such as Product development, Introduction, Growth, Maturity (Saturation) and Decline. Each stage featuring distinct characteristics, which pose challenges to managers of a product, the successful completion of all stages needs logical steps to be planned and applied to products. The life of a product opens up a gigantic word of wonders which invite thought provoking ideas for the strategic management.

What is Product Life Cycle – Concept with Advantages of Forecasting the Life Cycle of a Product to a Firm

Every product passes through four stages in its life namely, introduction, growth, maturity and decline. The concept of Product Life Cycle (PLC) highlights that sooner or later, all products will die and that if entrepreneurs wish to sustain its revenues, they must replace the products in the declining stage with the new ones.


With the product passing through different stages the small-scale entrepreneur faces varying challenges, opportunities and problems. Smaller businesses have a good reputation for innovation. Their greatest advantage is the speed at which they can respond to the demands of the market.

Every firm makes sales forecasts during introduction, growth and maturity stages of the PLC. To achieve the sales target, it formulates promotional, pricing and distribution policies.

Thus the concept of PLC facilitates integrated marketing policies relating to product, price, promotion and distribution.


The life cycle of a product has many points of similarity with the human life. From its birth, a product passes through various stages, until it is discontinued from the market.

The advantages of forecasting the life cycle of a product to a firm are as follows:

1. When the PLC is predictable, the entrepreneur can take in advance before the decline stage, by adopting product modification, pricing strategies, distinctive style, quality change, etc.

2. The firm can prepare an effective product plan by knowing the PLC of a product.


3. The entrepreneur can find new uses of the product for the expansion of market during growth stage and for extending the maturity stage.

4. The entrepreneur can adopt latest technological changes to improve the product quality, features and design.

What is Product Life Cycle – 10 Important Characteristics: Gestation Period, Birth, Growth, Maturity, Decline, Rebirth, Re-Growth, Re-Maturity, Re-Decline and Death

Though the product is considered to have a normal lifecycle it has different characteristics from lifecycle stages of living organisms.

Let us list these special characteristics below:

1. Gestation Period:

A product can have a long or short gestation period unlike living organisms where there is a fixed gestation period. E.g. Pigs have a gestation period of four months, human beings have a gestation period of nine months, rice/onions have ninety days gestation period etc.


A ‘ME TOO’ product can be launched within two to three months whereas a totally new to the world product may take many years to get developed and launched.

2. Birth:

Once the product is developed and ready, it may be launched (born) immediately or may be kept on hold till the market conditions are conducive and right for the launch.

3. Growth:

Growth is uncertain in products as infant mortality rate amongst the products is very high. It is said that out of thousands of products being launched by various organizations, only one or two survive and grow.

While all living organizations have fixed period of growth, products either grow instantly or very slowly. The rate of growth depends on various factors like external marketing environment, marketing strategy adopted by the organization, the amount of money spent on promotions, the efforts of the sales team etc.


4. Maturity:

Not all the products mature. Maturity is a stage where the product has constant sales and shows a steady rate of growth equal to the natural rate of growth of the market. There are many products that show a limited growth and start declining and die without maturity.

5. Decline:

Decline is a stage where the product stops growing along with the market and so even after returning the same sales volumes, starts losing market share.

6. Rebirth:

Products can have rebirth in a way of re-launch of the product by adding/replacing some of the features to make it attractive to the changing tastes of the consumers. One can see many products getting re-launched (taking rebirth) again and again to become attractive to the changing tastes of the consumers and growing further in reputation and stature.


E.g. ‘Horlicks’, ‘Lux’, ‘Bournvita’, ‘RIN’, ‘SURF’, ‘LIFEBOUY’ etc. Many of these products are being sold for over 100 years and have not lost consumer loyalty due to their re-launch to suit changing tastes of consumers.

7. Re-Growth:

Once the product is re-launched, it comes again into a new PLC and starts growing, maturing etc.

8. Re-Maturity:

The re-launched product can have a re-maturity stage at much higher sales volumes if re-launched before the decline had started and can regain its earlier position if decline had started.

9. Re-Decline:


Product will eventually reach the decline stage unless the marketing manager re-launches it again to avoid the decline.

10. Death:

Death of the product is its withdrawal by the organization when it stops earning and is not able to revive even after re-launch. There is no fixed duration for any of these life cycle stages. They vary from product to product and depend solely on the efforts of the marketing manager.

What is Product Life Cycle – 6 Different Phases: Development, Introduction, Growth, Maturity, Saturation and Decline

The following is the brief explanation of different phases of PLC:

Phase # 1. Development:

When an idea of product is conceived in the minds of entrepreneurs / promoters there begin the first stage. Ideas are obtained from both internal and external sources. The selected ideas will be screened, tested and certified for product development.

At this stage, product is in the concept form. Hence, there cannot be any sales. On the unborn product, management is investing heavy amount on its research and development. Hence, the sales curve touches the beginning zero point and profit curve on the negative side of graph showing loss position. Heavy investment without return results into losses.

Phase # 2. Introduction:


Once the product is successfully developed, it is ready to be introduced in the selected market segment. A product is really facing the real market situation in a large scale. Just like a new born baby, a product also experiences the difficulty of breathing, sharp light, environmental hazards, feeling problems etc. Management with anticipated demand (demand forecasting) enters the product to obtain effective demand. The market which has seen the product through media takes time to accept it. The customers are choosy and hesitant to go for a new one.

Hence, the following features appear at the introductory-stage:

a. Snail Pace Sales:

The pick-up period for sales is very lengthy due to customer’s hesitation, the difficulties associated with shifting from the existing product brands, lack of proper supply to all segments, dealers’ hesitation to keep and suggest for an alternative product, expansion problems of management, even low confidence of management also pushes down the sales.

b. High Promotional Costs:

Though the product was tested in the market while developing, it needs more investment to introduce on large scale. The fixation of product picture in the minds of customers’ needs highest efforts with heavy amount on promotional activities. The cost of advertisement free-samples, offers, trials, dealers and retailers promotion, establishment activities add to the cost. Both sales and cost are adversely related at this stage.

c. Inevitable High Price:

The management may try to fix the low price (unless high skimming price strategy is in practice) but the high costs, technological problems, low sales/returns etc., force them to fix high product price.


i. ‘Product failure’ is the common feature at introduction stage. Every amount of investment is a burden on the management with lowest sales and returns. Attempts are made to stimulate products, market pick up of products. As the product is at the point of decisive stage i.e., accept or reject by the customers, the result of hanging sword would be severe on part of introducers. The effect of positive impression would last forever. Hence, the management’s intelligent and cautious strategies would incorporate.

ii. Right advertisement.

iii. Systematized preparation and quick introduction.

iv. Newness in marketing strategies.

v. Proper attention on stocks, supply, channel selection.

vi. Effective promotional measures.

Phase # 3. Growth Stage:

Once the product is accepted and adopted by the customers, the sale picks up. This is the stage during which the sales volume increases followed by profits. In spite of prevailing market competition, the additional sales become common feature.

It shows following features:

i. The economies of scale (cost reduction)

ii. Channels of Distribution and distribution outlets increases.

iii. Additional Promotional expenditures have to be incurred to meet the competition trends and face successfully.

iv. Spreading the products to newer market segments.

v. Product improvements take place in terms of its styles, product packaging, wrapping etc.


Cautious steps should be taken by management during growth stage.

The following areas need to be considered:

i. Reduce efforts to attract new and maintain the existing customers.

ii. Promotional activities are boosted further to maintain the same tempo of marketing.

iii. Add to the product – features with recent expectations and practices.

iv. Quality to be improved to add to the customer’s satisfaction.

v. Competitive and comparative advantages should flow to the buyers specially to potential buyers who divert from competitor’s products.

Phase # 4. Maturity:

The end product of growth is maturity, sales increase at a declining rate i.e., total sales show an upward trend but marginal sales would decline. ‘Channels of Distribution’ are full, intensive competition more alternatives available to customers. Hence a shift of customers begins. Due to decline in sales, profit margin also falls. Producers struggle hard to match cost of marketing with thin marginal returns.

The product experiences the following situations:

i. Increasing total sales but declining marginal sales – There remains little space in growth in the market as the product has already reached every house hold. The gap between production and sales expands as demand comes with difficulty in marketing the product.

ii. Controlled promotional expenses – The ratio between the promotional costs and sales value speaks the normal rate. As nothing is left in the market for expansion, the existing cost on advertisement are just maintained to support dealer’s active support.

iii. Normal Price – The ability to charge higher prices reduces gradually. Very normal rates are charged and exceptional price differentiation is followed for product difference.


The manufacturer enjoys maximum profit with matured product. Creative marketing is followed by manufacturer on pushing the product to every corner.

The following strategies are to be adopted by producers:

Extension Strategies:

The extension strategy is common during the maturity stage. Here the marketer prefers to obsolete the weaker products and concentrate more on profitable or newer products.

The two ways of extension activities are:

i. Product modification

ii. Market modification

i. Product Modification:

Accepting the same product for longer period is boring to the customers. They expect change. Hence the producer has to bring changes in the product.

The possible changes would be:

a. Product Quality – Add to the existing quality by its taste, capacity, applicability, multiplicity, durability etc. A qualitative improvement is as good as making a fresh market. You can sell second round to the existing customers circle.

b. Brand Name – Modify the brand name. Selling the same with new brand name. Binaca tooth paste changed to Cibaca, Birla Cements to Ultratec cement etc.

c. Size of pack – Modification in packing size, content. Either smaller packs or additional larger packs.

d. Style change – Usually consumer’s durable product expects new styles very frequently. Consumer who experiences a new style often keeps on purchasing the product. An advertisement is just sufficient to sell a new style with customers waiting for it. Change in style should be right to the tune of change in taste and fashion. Smaller car concept has entirely changed the car market. Smallest mobiles, colour screens in every pocket etc.

e. Wide range – Add different range – products to the existing. Chocolate market, wide range, biscuit product, kid bicycle etc., experience the wide range products in the same line. Hero cycles has introduced not less than 20 ranges in the same product.

ii. Market Modification:

Every attempt is made to increase in sales quantity. The brand users’ number and rate per user should also be increased. Both can be increased by –

a. Marginal reduction in price to attract non-users, to maintain users.

b. Widen the channels of distribution specially effective smaller distribution points.

c. Change the message of advertisement to keep on watching, newer Medias new models.

d. Rate of consumption suggests more time consumption, good for health. Brush your teeth day and night will double the market.

Phase # 5. Saturation:

The peak – point of product life is saturation. The features of saturation exist everywhere in all components. Consumption achieves constant rate, presence of replacement sales, hard work to get a tiny market share with higher costs, rapid fall in price thus making the profit margin thinner and thinner, intensified competition strategies and costs etc. The rise and fall of sale depend upon supply and demand i.e., exclusively on market forces.

Phase # 6. Decline:

The last stage in the product life cycle is decline. Downward trend persists in the sale of product. The changes brought by technology, new product of competitors, taste and fashion, styles, would make an existing product obsolete. Product brand becomes too old to opt for purchase in front of another product standing with strong features.

The important features are:

i. Sales – A sharp decline in sales persists throughout this stage. The customers’ trend of shifting towards new product makes the existing product too old with pale demand. The firm may be forced to pave the way to new one and close down production.

ii. Price – The attempt made to attract new-customers in maturity stage by reducing the price will not yield the expected results, hence the trend of reducing price continues. Price-reduction wars make the firm position worst one. Mounting stocks makes the firm to clear off them by cutting prices. The profit trend is also similar to price and sales trend.

iii. Promotion – Promotional activity which was enhanced/expanded at growth stage now brought under rationalisation, i.e., maintaining only the most needed one. No additions are made to promotion. Most of the companies fail to manage their ageing products.


The management is placed in a crucial stage while managing the decline stages. Unless advanced preparations are planned by the organisers, the ageing product poses severe threats with unexpected turns. The mounting costs declining sales and profits are to be well balanced and managed.

Though not easy, still management may adopt following strategies to generate profit as suggested by W.J. Stanton:

i. Revitalize the product in functional sense.

ii. Streamline the product by reducing unprofitable one.

iii. ‘Run- out’ Strategy cut down all cost to bare minimum to add the profits for remaining short period. (Increase profit by cost cutting).

iv. Abandon the product, Last step to stop it.

What is Product Life Cycle – Significance and Advantages

The concept of product life cycle indicates that sooner or later all products die and that if management wishes to sustain its revenues, it must replace the declining products with the new ones. The product life cycle concept also indicates as to what can be expected in the market for a new product at various stages.

Thus, the concept of product life cycle can be used as a forecasting tool. It can alert management that its product will inevitably face saturation and decline, and the host of problems these stages pose. The product life cycle is also a useful framework for describing the typical evolution of marketing strategy over the stages of product life cycle. This will help in taking sound marketing decisions at different stages of the product life cycle.

After a product has been developed, it is launched in the market with the help of various promotional devices such as advertising, sales promotion, publicity and personal selling. In other words, product development (some people call it incubation stage of product life cycle) must be followed by the successful introduction of the product in the market.

For this, planning for introduction of the product starts during the process of product development itself. Every firm makes sale projections during introduction, growth and maturity stages of the product life-cycle.

To achieve the projected sales target, it formulates promotional, pricing and distribution policies. Thus, the concept of product life-cycle facilitates integrated marketing policies relating to product, price, promotion and distribution.

The advantages of forecasting the life cycle of a product are as follows:

(i) When the product life-cycle is predictable, the management must be cautious in taking advance steps before the decline stage, by adopting product modification, pricing strategies, distinctive style, quality change, etc.

(ii) The firm can prepare an effective product plan by knowing the product life-cycle of a product.

(iii) The management can find new uses of the product for the expansion of market during growth stage and for extending the maturity stage.

(iv) The management can adopt latest technological changes to improve the product quality, features and design.

(v) The management can abandon the product which is not demanded by the customers.

What is Product Life Cycle – 8 Major Types: Normal or Standard, Style, Fashion, Fad, Growth Slump, Cycle-Recycle PLC Curve, Scalloped PLC, Learning Curves & PLC

PLC is classified into following types:

Type # 1. Normal/Standard:

Normal/standard PLC is for most of the products where the marketing manager can control the PLC stages by various promotional activities and strategies. Standard PLC has product life cycle curve.

Type # 2. Style:

A style is the manner in which a product is presented by the manufacturer. These styles come and go and some styles repeat themselves after a period of time. E.g. In cell phones, the current style is touch screen till such time that another style replaces it. Hair styles are another example that keep changing.

Type # 3. Fashion:

Fashion is the current trend or popular style. Fashion can repeat itself over and over again. E.g. In the early sixties, all trousers used to be loose and had bottom sizes of twenty inches. This style changed to skin tight trousers and then to bell bottoms and again went back to loose trousers in the late nineties. The current fashion is straight fit.

Type # 4. Fad:

Fad is a product that peaks very quickly and fades immediately. Sometimes a fad, after losing its peak may follow a standard life cycle. E.g. At one time the Rubik cube was a fad and was the highest selling product in various forms. Now the Rubik cube is available but it has lost its craze.

The PLC curves are shown below in figure 1.36:

Type # 5. Growth Slump PLC:

Some products, because of their innovation level gain instant acceptance and show a very high growth pattern initially and once their innovative attraction dries down, they slump and attain a maturity level that is much below the peak they have achieved. E.g. the Rubik cube, some kitchen appliances etc.

Type # 6. Cycle-Recycle PLC Curve:

Some products when introduced are given a high promotional push leading to high growth and then they fall down. The company gives another push to again achieve some growth normally, which is lower than the first push.

This keeps on happening and we get a cycle-recycle type of PLC. E.g. Drugs against seasonal diseases, seasonal products like soft drink concentrates, soft drinks etc. In such type of PLCs, if the company fails to push again, it will become a growth slump PLC.

Type # 7. Scalloped PLC:

A smart marketing manager, alert at product growth keeps innovating newer uses of the product and so gives a new lease of life to the product that shows signs of maturity in PLC and again a speedy growth and maturity again to new growth leading to a scalloped PLC. E.g. Nylon has shown this pattern as it keeps getting newer uses.

Mobile instruments are also found to have a scalloped growth pattern due to newer apps being introduced in them.

Type # 8. Learning Curves & PLC:

The learning curve (also known as an experience curve) is generally of two types – high learning curve and low learning curve. They can often play a role in determining a firm’s long-run success or failure and therefore also play an important role in competitive marketing strategy.

i. High Learning Curve:

The time required for production reduces as the tasks done are repetitive. In other words, the efficiency of a worker/production unit/organization improves due to repetition of any work by learning process. The rate of improvement in efficiency is high at the beginning but slows down after a period when the production levels go up.

When the learning/experience curve is high, the cost of production goes down and speed of production goes up making the organization competitive and it can reduce the price of the product or book more profits. This situation is called high learning curve of the PLC (actually it is during the growth period of PLC when the high learning curve is present).

If the organization is not in a position to take advantage of the high production rate to increase the sales volumes, by increasing the promotions/reduction in profits, the organization can use this high learning curve to improve the quality of the product by adding more features at the same cost of production and then use it as differentiation and specialization to create product price premium to increase profitability.

A high learning curve also comes in to effect for customers and helps achieve growth of the product in short times. The high learning of customers is achieved through high volume of promotions (the product information/message is repetitively bombarded on the customers) to improve the purchase efficiency of the customers for the product. The high learning curve in production helps in reduction of cost and so helps in increasing the spending on promotions.

Most of the products, without having newer complex technology show high learning curves during growth periods.

ii. Low Learning Curves:

When consumers are unable to understand the technology of the product or if the product is not user-friendly, it takes longer time for diffusion of innovation and so the growth of sales is much lower. Fig.1.39 shows comparison of innovation of diffusion of five products where Facebook, Gmail, Skype and Twitter show slow learning and a similar product – WhatsApp, that is user-friendly shows a high learning curve.

What is Product Life Cycle – 4 Important Stages: Introduction, Growth, Maturity and Decline

PLC has four stages viz.:

1. Introduction,

2. Growth,

3. Maturity, and

4. Decline.

1. Introduction – The Introduction Stage is preceded by ‘production planning and development’. This period requires greater investment. This investment should be gradually recouped as the sales pick up.

After testing, a product enters the introduction stage and then the product becomes available in the market. Sales would pick up gradually as prospective buyers learn of the product through advertising and other selling techniques. Profits will be low as part of the investment is to be recouped in addition to heavy expenditure on selling and distribution.

2. Growth – In the Growth Stage, both sales and profits will begin to rise. Similar other new products begin to appear in the market as substitutes and competition. The management should change its approach by changing the strategy from “Buy My Product” to “Try My Product”. If necessary, prices are reduced.

3. Maturity – During the Maturity Stage, the manufacturer introduces new models or adapts methods such as trading-in etc. to promote the sale of their brands with a view to retaining their market position. Some of the promotional efforts (as the supply exceeds demand) may lengthen the span of this stage, but it will not be a permanent solution.

4. Decline – At the final stage of Decline, profit margins touch a low level, competition becomes severe and customers start using newer or better substitutes.

Product lifecycle concept may be used as a managerial tool. Marketing strategies must change as the product goes through its lifecycle. Repositioning a product can lead to a new growth cycle. Repositioning is basically changing the image or perceived uses of the product.

What is Product Life Cycle – 8 Important Factors Affecting Product Life Cycle: Rate of Technical Change, Market Acceptance, Ease of Competitive Entry and a Few Others

According to Joel Dean, “The length of the product life-cycle is governed by the rate of technical change, the rate of market acceptance and the cease of competitive entry.”

Important factors affecting the product life-cycle are as under:

Factor # 1. Rate of Technical Change:

Rate of technical change affects the product life-cycle. If this rate is very high, the lifecycle of the products in that country will be very limited because new and improved products take place of the old products. On the other hand, if the rate of technical changes in a country is not so high, the life-cycle of the products in the country may be longer. For example, rate of technical changes in India is lower when compared with that of other developed countries. As a result of it, the lifecycle of products in our country is higher than that of the developed countries.

Factor # 2. Rate of Market Acceptance:

Product lifecycle is also affected by rate of market acceptance. If the rate of market acceptance is high the lifecycle of products in that country is limited. It is because the customers who have accepted the new products today can accept another product tomorrow and the existing products will soon stand out of the market.

Similarly, if the customers accept the product at a slow rate, the life cycle of the products may be quite long. For example, in India, the market acceptance is very slow, and therefore, here life span of the products is very long.

Factor # 3. Ease of Competitive Entry:

The success or failure of a product in the market depends to a large extent upon the situation of competition in the market. If the competitors can enter into a market very easily, the lifecycle of the product will be very short because the competitors can drive the products out. On the contrary, if the competitors cannot enter into a market so easily, the lifecycle of products in such market can be fairly long.

Factor # 4. Risk Bearing Capacity:

If the enterprises have risk bearing capacity, they can keep their product alive in the market for a long period as they can face the challenges of the market very effectively.

Factor # 5. Economic and Managerial Forces:

Economic and managerial forces of an enterprise also determine the success of the enterprise in the market to a great extent. Enterprises having strong economic and managerial forces, can keep their products standing in the market and the lifecycle of their product will be longer that of the lifecycle of the products of those enterprises having weak economic and managerial base.

Factor # 6. Protection by Patent:

If the patent of a product is registered, the lifecycle of the product can be fairly long, and if the patent of a product is not got registered, the lifecycle of the products gets cut-short.

Factor # 7. Personnel Strategy:

Product lifecycle is also affected by the personnel strategy used in marketing.

Factor # 8. Business Reputation:

Business reputation also affects product life cycle. If the reputation is good in the market as the producer of good quality products, its product will last long in the market as compared to the products of those enterprises whose goodwill is not good or which are not much known to the public.

What is Product Life Cycle – Relevance: New Products to Succeed Current Product, Image Changeovers for Current Product and a Few Others

Understanding the PLC helps the marketing manager design the strategies that are useful and result-oriented to promote the sales of the product. Understanding the PLC stage always helps to plan.

1. New Products to Succeed Current Product:

When the marketer understands that a product is not going to get revived through re-launch, the marketing manager plans for a new product that can succeed the existing product when the product ceases to be alive. The marketing manager needs to plan the exit of the product also, as he can let the product be there and if possible try and milk the product dry (earn maximum possible profit by stopping expenses).

2. Image Changeovers for Current Product:

When the marketer understands that the product is in decline stage, he can decide to give an image changeover based on market research. The image changeover helps the product to attract customers back to the product and the sale revives. Image changeover can simply be change in packaging or may be just change in advertisements.

3. Re-Launch of the Current Product:

In case the image changeover is not helping the product to revive its sales, the marketing manager plans for a re­-launch of the product that shall give it a new lease (new PLC).

4. Planning of Media:

Depending on the PLC stage a product is passing through, a marketing manager can decide the level of media requirements and promotions. Media and promotion requirements at every stage are different and the marketing manager can take the required decision.

5. Planning of Promotions for the Product:

During each stage of the PLC, different types of promotions need to be planned. After understanding the stage of the PLC that a product is passing through, the marketing manager can plan relevant promotions.

There are various methods that help understand the PLC stage of any product. Market research agencies also help in understanding the PLC stage so that marketing managers can plan their activities and strategies.

What is Product Life Cycle – Strategies Adopted on the Basis of PLC Concept

Strategies adopted at the introduction stage. At the introduction stage, the product has just come out in the market; it has very few competitors and very few customers also. Thus, sales are low and cost per customer is very high. The basic objective of a company is to create product awareness and encourage trials by the prospective customers.

Thus, a marketer should adopt the following strategies before introducing a product in the market:

(i) A basic product or service should be offered. Since there are no (or few) competitors the company should enjoy early bird status.

(ii) Price should be high; since cost per unit to the company is high and profits are negligible.

(iii) Selective and effective distribution network should be chosen.

(iv) Advertising should be done at a large scale in order to build the product’s awareness among early adopters and dealers.

(v) Heavy sales promotions should be done to encourage trials.

Strategies Adopted for Product on the Basis of PLC Concept:

Growth Stage:

It is the second stage of PLC, wherein a product’s sale increases rapidly, cost per customer to the company (in terms of advertising and sales promotion) reduces and profit earnings increase. Since the product holds a big share of market thus competition rises. At this stage, the major objective of the company is to maximize its market share.

In order to achieve its objective, following strategies should be adopted by any product manager at growth stage of a product:

(i) Apart from the basic product its extensions should be introduced.

(ii) Mass marketing should be done in order to penetrate deeper into the market.

(iii) Create a brand image; utilize the advantage of being an innovator.

(iv) Distribute the product intensively.

(v) Reduce sales promotion/since the demand is already high.

(vi) Build awareness and interest in the market by advertising.

Maturity Stage:

This is the third stage of PLC. It stays longer than other stages and poses big challenges to the marketers. The maturity stage is further divided into three phases – growth, stable and decaying maturity.

In the first phase, the sales growth rate starts to decline. There are no more distribution channels to tab as all the existing channels have been used. New competitive forces emerge.

In the second phase, sales flatten on per capita basis because of market saturation. Most of the population has tried the product and future sales are governed by replacement demand.

In the third phase of decaying maturity, the absolute level of sales starts to decline and customers begin switching to other products. The third phase of maturity poses the greatest challenge.

Strategies generally adopted at this stage by marketers are:

(i) Increase in advertising, both trade and consumer promotions.

(ii) Frequent markdowns.

(iii) Increase in R&D budget to bring in product improvements and line extensions.

(iv) Market Modification – A company might try to expand the market for its mature brand by working with two factors that make up sales volume viz., Number of brand users and Usage rate per user.

(v) Product Modification – Managers also try to stimulate sales by modifying the product’s characteristics through quality improvement, feature improvement or style improvement.

(vi) Marketing program Modification – A marketer can think in terms of modifying his marketing program features like price, distribution, advertising, sales promotion, personal selling and services for better acceptability of the product.


We can take the example of Maggi. Maggi has enjoyed the status of innovator by introducing a ready to eat two-minute noodles, but gradually this product is moving towards maturity stage, where competitors like Topramen, Foodies, Sunfeast noodles etc. have come up and started crunching the market share. Thus sales were declining and profits started reducing.

Strategies adopted by its managers were:

(i) Introducing the concept of “Meri Maggi” by focusing on emotional attachment people have with Maggi.

(ii) Modifying the product by introducing new tastes like “Maggi Capsicum”, “Maggi Dumdar” and “Tomato Maggi”.

(iii) Launching contests like “Me and My Maggi” where people tell their stories, and their photographs and stories are published on the Maggi pack.

(iv) By introducing “Maggi Chotu”, an Rs.6 pack for single use for children etc.

Decline Stage:

A product can enter into its decline stage because of various reasons like technological advancement, shift in consumer tastes, increase in domestic and foreign competition etc. These can lead to over capacity increased price-cutting and profit erosion. The major objective of the company should be to reduce expenditure and milk the brand.

In the decline stage of PLC, a manager should adopt the following strategies:

(i) If the product line is weak, then a manager should phase it out.

(ii) Cut prices of the product.

(iii) Reduce the sales promotion to minimal level.

(iv) Reduce the advertising expenditure to the minimum level needed to retain hard-core loyals.

What is Product Life Cycle – Importance of the Study of PLC

The Product Life Cycle concept is used in formulating appropriate marketing strategy and its prompt implementation. The concept enables the marketer in planning the entry of a new product in a chosen market. Product Life Cycle assists in the postponement of the desirable life phase of a product, e.g., maturity stage.

The actual position may vary from what is predicted and expected. The marketer should make appropriate planning before marketing the product. He should also study the life history of similar products in different countries and markets. This use of those trends helps him in understanding the life cycle of his product.

In short, product life-cycle concept is very useful in the management of lifecycle of a product through corporate strategic planning and marketing strategic planning.

Importance of the study of Product Life Cycle can be explained as under:

1. As a Forecasting Tool:

Product life cycle is an important tool for sales forecasting. With the study of product life cycle management one can be aware of the problems that a product faces at different stages.

2. As a Planning Tool:

The study of product life cycle is an important tool in the hands of planners. This study reveals the marketing strategies and policies of competitors. It also reveals the effect of their policies and strategies upon sales and profit of the enterprise. On the basis of this information, marketing manager of the enterprise can prepare his marketing plan.

3. As a Control Tool:

The study of product lifecycle also helps in controlling the marketing activities of an enterprise. With the help of this study the marketing manager can make necessary arrangements to make the product available according to the demand.

4. Marketing Programme:

Different policies, procedures and strategies are followed in the different stages of the life cycle of a product. So, management can prepare the marketing programmes accordingly and succeed.

5. Estimation of Profits:

The quantum and rate of profits increases or decreases with the quantum of turnover. At introductory stage, profits are negligible, then they go up and after some time they begin to fall and gradually become nil. Thus, the management can well predict the firm’s profits in different stages of the lifecycle of the product.

6. Development of New Products:

According to the concept, the life of a product is always limited. The product will die out over a period of time irrespective of the fact that the product had made tremendous progress during the past. Knowing this fact, management always tries to improve its existing product or to develop a new product.

It is possible to foresee and predict the profile of the proposed product’s life, the events that are likely to take place in the market, and the issues on pricing channel and promotion that are likely to come up. Through several probing’s one should even be in a position to predict when competitors are likely to enter the scene, in what possible areas they will imitate the product, and what will be the extent of cost advantages the competitors will have due to ‘copying’ and what pricing strategies they may follow to undercut the pioneer.

Products are just like human beings in terms of their life cycles. From its birth, a product passes through various stages, until it is finally abandoned, i.e., discontinued from the market.

These stages taken together are referred to as “The Product Life Cycle or PLC”.

What is Product Life Cycle – Uses

PLC helps a company to proactively manage its product portfolio instead of letting market forces shape it. It alerts the company to go after a balanced portfolio instead of having too many products getting stuck at one place. For example, if a company has all its products in the growth or maturity stage it may be making money today but has nothing left for tomorrow. A smart company would certainly begin to plan for future by treating PLC as a basis for building profit generating assets in the long run.

PLC makes companies realize that their products, however novel and unique they might be, would have to die one day due to entry of rivals who may hit back with better and improved versions. There is no use starting off with a very high price exploiting a gap and eventually cutting down the price after feeling the heat of competition.

Consumers, in such a case, would begin to think that the company was too greedy and turned a blind eye to customers’ need to have a good product at a reasonable price. They may even begin to that such companies who rushed to skim the cream while the going is good.

PLC helps companies to constantly innovate and come out with technologically superior products every now and then. Without making big investments on research and development, a company can never hope to survive and flourish in a competitive arena. It has to keep working on new product concepts so that as and when it finds a particular product in a declining stage, it has many more waiting in the queue replacing such unviable products. All products eventually will be put to rest and sent to their burial grounds.

Consumers are fickle minded and do not remain wedded to any trend, fashion or fad for a long time, so companies have to realize that they cannot hope to grow at exponential rates, resting on past laurels. They have to live with a reasonable growth rate, rather than trying to go too fast too soon expecting miracles to happen almost always. Capacity additions, therefore, need to be kept under limits, without going overboard at any point.

At every stage in the life of a product, a company should have an appropriate plan in place so that it does not get impacted by market forces negatively. Armed with a balanced portfolio, a company would be able to manage competitive threats, tastes and preferences of customers and rapid technological changes in a better way. As rightly pointed out by Philip Kotler, “the PLC concept helps marketers interpret product and market dynamics”

What is Product Life Cycle – Reasons for Irregularity of PLC

The causes for irregularity of PLC may be due to the following reasons:

(a) Sales of most, though not all, products broadly follow the PLC pattern.

(b) The characteristics of competition and unit profits tend to follow as postulated above, i.e. profits peak during the rapid growth phase and problems of competition and excess capacity become more acute as the cycle advances.

(c) The average length of the PLC is tending to shorten as a result of economic, technological and social change. Products make profits for shorter periods.

(d) There is no irregularity across products in the length of the stages in the PLC. For some it can be decades and for others it can be less than a year. In particular, the maturity stage of a brand can be extended for many years by innovative marketing. Similarly, aggregate product decline can be postponed for generations in the absence of major technological breakthrough (e.g. cigarettes, cars).

(e) Often the PLC can be temporarily ‘bent’ by heavy promotional expenditures in the decline stage.

Turning Point Indices in Product Life Cycle:

Sales forecasts need to focus on when and at what sales level market saturation will occur, what competitive changes can be anticipated and what progress is taking place in alternative products and technologies.

The following checklist indicates some of the detailed information necessary to identify turning points in the PLC:

Market Saturation:

a. Is the growth rate of sales volume declining?

b. What is the current level of ownership compared to potential?

c. Are first time buyers a declining proportion of total sales?

Nature of Competition:

a. How many competitors have entered or plan to enter?

b. Is long-term over capacity emerging?

c. Are prices and profit margins being cut?

d. Are advertising and promotional elasticities declining and price elasticity increasing?

Alternative Products and Technologies:

a. Are new products being created in this industry or others which may meet consumer needs more effectively?

b. Is significant technical progress taking place which threatens existing products?

What is Product Life Cycle – Experience Curve in Product Life Cycle

The essence of experience curve theory is that the real costs of generating products and services decline by between 20 and 30 per cent whenever cumulative experience doubles. An important distinction needs to be drawn between the experience curve and the learning curve. The latter relates to labour hours and hence labour cost.

As a consequence, the reduction in costs due to the learning curve is much lower than that due to the broader based experience curve. All costs and cost effects are reflected by the experience curve. Several causes of cost reduction act together within the experience curve, such as the learning experience, the effect of labour specialization and scale effects due to increased volume.

The experience curve is not derived from accounting costs but by dividing the cumulative cash inputs by the cumulative output of end products and the cost decline is shown by the rate of change in this ratio over a period of time. From this rate of change managers can see how and why their competitive costs are shifting. If estimates can be made of competitors’ experience curve effects, this should reveal which are the low-cost competitors and which are not and hence which are at risk and from whom.

The main strategic message from the experience curve is that if costs per unit in real terms decrease predictably with cumulative output, then the market leader has the potential to achieve the lowest costs and the highest profits. It is relatively easy for management to recognize the profit implications of design changes, product obsolescence, price variations and so on in isolation for a particular product.

Yet insufficient acceptance of the concept of the PLC as a basis for planning the overall strategy of a product seems to exist. A product life-cycle is a way of portraying the cash flow, profitability and sales level of a product. PLC is represented in terms of funds flow.

Prior to its launch all funds flows are negative due to R&D and related activities. Even after launch it takes some time for positive funds flows to counteract the heavy initial promotional and other launch outlays. When the product is deleted, funds cease flowing altogether.

What is Product Life Cycle – Advantages

Following are some of the identified advantages:

i. When the product life pattern is known, the management must be cautious in taking advance steps, before the decline stage, by adopting product modification, pricing strategies, style, quality change, etc.

ii. The firm can prepare an effective product plan, by knowing the PLC of a product.

iii. The PLC will greatly help the management in drawing future plans of the firm.

A management may be able to adopt some measures to control the PLC. They include-

a. Extension of the life at maturity and saturation stage by adopting new packaging, re­pricing or product modification, etc.

b. Creation of new uses by expansion of the market.

c. Creation of more varieties of the product among current users. For instance, Amul Milk powder, through advertisement emphasises many uses, in preparing milk, tea, curd etc. It is like having a dairy in your home.

d. Adoption of the latest technological changes, fashion changes, market acceptance, etc.

The Product Life-Cycle concept is used in formulating appropriate marketing strategy and its prompt implementation. The concept enables the marketer in planning the entry of a new product in a chosen market. PLC assists in the postponement of the desirable life phase of a product, e.g., maturity stage. The Indian Tobacco Company could revive the bread­winner brand, ‘Scissors’ facing the exit in Indian market through a series of strategies after 1962.

It also succeeded in the second revival in 1981. The two revivals are the best examples of successful management of the PLC of a brand. The “Scissors” is an 85 year old brand and continues its dominance. In short, PLC concept is very useful in the management of life-cycle of a product through corporate strategic planning and marketing strategic planning.

What is Product Life Cycle – Limitations

On the negative side, critics point out the difficulty in making predictions re­garding the life cycle patterns for different products with a certain amount of accuracy and certainty.

The limitations are:

i. A product may appear to be mature when actually it has reached a plateau prior to another upsurge. The sales of a product might have declined because of poor advertising or entry of competitive products backed up by high promotional effort. Instead of taking corrective measures, if marketers erroneously think that the product is to be placed on the stretcher and withdraws the promotional budget and stops investing in R & D that would actually worsen the situation. The product portfolio eventually may get exhausted sooner than expected.

ii. PLC is not to be used as a weapon to destroy products that have still lot of steam left. But, unfortunately, this may happen if marketers are wedded to its philosophy.

iii. PLC is the result of marketing activities and it should never be accepted as a cause of variability in sales. Once this happens, marketers would be thrown out of gear. Strict adherence to PLC can lead a company to misleading objectives and strategy prescriptions.

iv. The duration of PLC stages is unpredictable because it is governed by factors which are outside the purview and control of any single company. It is difficult for marketing management to gauge accurately where a product is on its PLC graph. It is not easy to predict when the growth stage ends and when the decline would start. A rise in sales per se is not necessarily evidence of growth. A fall in sales per se does not typify decline.

v. Furthermore, some products do not (or to date, at the least, have not) experience a decline. Coca Cola and Pepsi are examples of two prod­ucts that have existed for many decades, but are still popular products all over the world. Both modes of cola have been in maturity for some years.

vi. Another factor is that differing products would possess different PLC “shapes”. A fad product would hold a steep sloped growth stage, a short maturity stage, and a steep sloped decline stage. A product such as Coca Cola and Pepsi would experience growth, but also a constant level of sales over a number of decades. It can probably be said that a given product (or products collectively within an industry) may hold a unique PLC shape, and the typical PLC model can only be used as a rough guide for marketing management. This is why it’s called the product life cycle.