Note on Product Life Cycle

  • Note
  • Things to remember

Product Life Cycle (PLC)

A new product passes through various stages known as product life cycle. Product life cycle relates to both brand and category of products. It's time duration varies from product to product. Modern product life cycle has become shorter and shorter as products in the mature stages are being renewed by both market segmentation and product differentiation.

Companies always try to maximize the profit and revenues over the whole life cycle of a product. In order to achieve the desired level of position and profit, the introduction of the new product at the proper time is essential. If the new product has appealed to the consumer and no stiff competition is present there then the company can charge high prices and earn high profits.


Product life cyclee
Product life cycle























Stages of Product Life Cycle

Product life cycle consists four stages:

  1. Introduction stage
  2. Growth stage
  3. Maturity stage
  4. Decline stage

Introduction stage

Product is introduced in the market for intention to build a clear identity and excessive promotion is done for maximum awareness. Before actual offering of the product to consumers, the product goes through product development, involves prototype and market tests. Organization incurs more costs in this phase and also bear additional cost for the distribution. There are few customers at this phase, means low sales volume. So, during introductory phase organizations profits shows a negative figure due to huge cost but low sales volume.

At introduction phase, the organization core focus is on establishing a market and rising demand for that product. So, the impact on marketing mix is as follows:

Branding, quality level and intellectual property and protections are obtained in order to stimulate consumers for the overall product category.

High(skim) pricing is used to make high profits with the intention to cover initial cost within a short period and low pricing is used to penetrate and achieve the market share. Company's choice of pricing strategy depends upon their goals and objectives.

Distribution at this phase is usually selective and scattered.

Promotion is done with the intention to build brand awareness at introductory stage. Samples are provided which is fruitful for attracting early adopters and potential customers. Promotional programs are more important in this phase. It is as much essential as to produce the product because it positions the product.

Growth Stage

At this stage, firm’s sales and profits begin increasing and competition also starts to increase. The product also becomes well recognized at this stage and some of the consumers repeat the purchase patterns. During this stage, firms focus on gaining market share and brand preference. This stage is market acceptance stage. But due to more competition, company invest more in the advertisement in order to convince customers so profits might decline near the end of growth stage.

Effect on 4P's of marketing:

Along with maintaining the existing quality, new improvements and features in product quality may be done. All this is done in order to compete and maintain market share.

Price is maintained or may increase if the company gets high demand at a low competition or it may be reduced to attract more consumers.

Distribution will become more significant with the increase in demand and acceptability of the product. Additional channels are added for intensive distribution to meet increasing demand. On the other hand, resellers get more interested in the product, so trade discounts are also minimal.

Promotion is increased, at the growth stage. When acceptability of the product increases, more efforts are being made for brand preference and loyalty.

Maturity stage

Brand awareness is strong so that sale continues to grow but with a declining rate as compared to past maturity stage. There are more competitors with the same products at this stage. So, organization defend the market share as well as extending product life cycle, rather than making the profits. By offering sales promotions for the encouragement of retailer to provide more shelf space for the product than that of competitors. At this stage, normally loyal customers make purchases.

Marketing mix decisions include:

Organizations add features and modify the product to compete in the market and differentiate the product from competition at maturity stage. It is the best way to increase market share and get dominance over competitors.

Because of high competition, at maturity stage, the price is being reduced in order to compete. It attracts the price conscious segment and also retains the customers.

New channels are included to face intense competition and incentives are provided to retailers to get shelf preference over competitors.

Promotion is done to create product differentiation and loyalty. Incentives are also provided to attract more customers.

Decline stage

Decline in sales, unfavorable economic conditions, and change in trends explains decline stage. The market becomes saturated and the sales decline at this stage. It may also be due to technical obsolescence or change in customer taste.

At decline stage company has three options:

  1. Maintain the product, Reduce the cost and find new user of the product.
  2. Harvest the product by decreasing marketing cost and continue offering the product to loyal niche until the zero profit.
  3. Discontinue the product if there’s no profit or a successor is available. Selling out to the competitors who want to keep the product.

Marketing mix decisions depend on company’s strategy at declining stage. For example, if the company desires to harvest the product will remain same and the price will be decreased. Supply will be reduced dramatically in the case of liquidation.

Limitations of Product Life Cycle (PLC)

Product life cycle is criticized because it has no any empirical support and it is not advantageous in special cases. Different products have dissimilar properties so their life cycle also varies. It shows that product life cycle is not best techniques for the prediction of the sales. Sometimes managerial decisions also affect the life of products but in this case, product life cycle is not playing any role. It is very fruitful for larger firms and corporations but it is not hundred percent accurate method for the prediction of the life cycle and sales of products in every situation.



Kotler, P., & Armstrong, G. (2013). Principles of Marketing. Chennai: Pearson India Education Services Pvt Ltd

  • A new product passes through various stages known as product life cycle
  •  Product life cycle relates to both brand and category of products
  • Companies always try to maximize the profit and revenues over the whole life cycle of a product
  • Product is introduced in the market for intention to build a clear identity and excessive promotion is done for maximum awareness.



Very Short Questions



No discussion on this note yet. Be first to comment on this note