The Product Life Cycle or PLC is like a tool used by marketing managers (market) to gauge/engage the progress of a product, especially relating to sales or revenue accrued over time. The Product Life Cycle or PLC is based on a few key assumptions, including that a given product would possess an introduction, growth, maturity and decline stage. Furthermore it is assumed that no product lasts perpetually on the market. Last but not least a firm must employ differing strategies, according to where a product is on the PLC.
Introduction
In this stage, a product is launched onto the market. To stimulate growth of sales/revenue, use of advertising may be high, in order to heighten awareness of the product in question.
Growth
The product's sales/revenue is increasing, which may stimulate more marketing communications to sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
Maturity
A product's sales start to level off, and an increasing number of entrants to a market produce price falls for the product. Firms may utilise sales promotions to raise sales.
Decline
Demand for a good begins to taper off, and the firm may opt to discontinue manufacture of the product. This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service. However, if a product services a niche market, or is complementary to another product, it may continue manufacture of the product, despite a low level of sales/revenue being accrued.
Introduction
In this stage, a product is launched onto the market. To stimulate growth of sales/revenue, use of advertising may be high, in order to heighten awareness of the product in question.
Growth
The product's sales/revenue is increasing, which may stimulate more marketing communications to sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
Maturity
A product's sales start to level off, and an increasing number of entrants to a market produce price falls for the product. Firms may utilise sales promotions to raise sales.
Decline
Demand for a good begins to taper off, and the firm may opt to discontinue manufacture of the product. This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service. However, if a product services a niche market, or is complementary to another product, it may continue manufacture of the product, despite a low level of sales/revenue being accrued.