The term ‘life cycle’ is borrowed from biology. Like human beings, the products also have a finite life cycle. The life cycle span is measured by the chronological history of sales from the launch of the product up to the withdrawal from the market. LUX Beauty Bar is in the maturity stage of its life cycle.
A Product life cycle is divided into four stages – Introduction (a seed is planted), Growth (root takes place and leaves come out), Maturity (adulthood takes place), and Decline (plant begins to shrink and finally die). “Life of a product is less than a year in today’s times. When you create a product, you also prepare for its demise, because after that there are product extensions.” Some of the important points relating to PLC are as under:
i. Products have a limited life,
ADVERTISEMENTS:
ii. Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller,
iii. Products require different marketing, financing, manufacturing, purchasing, and human resource strategies in each life cycle stage.
Image Source: infonam.com
1. Introduction:
This is the stage where a seller has to stimulate demand for the introduced product in the market to gain a foothold. At this time the sale begins at zero and the increase is slow & steady. Profits begin from a negative side because of the heavy cost of R&D and heavy advertising cost.
ADVERTISEMENTS:
Thus, it is a period of high cost and low volume. It takes time to gain experience and acceptance. The duration of introduction stage depends upon many factors like acceptance of the product by consumers and the faith of producers to provide support during the interim period. The computers and mobile phones were accepted immediately, but laundry detergent presents a case of very slow market acceptance.
2. Growth:
During this period sales and profit increase faster as the consumers and the trade accepts the product. Repeat orders from initial customers are obtained and word-of-mouth advertising leads to more and more of sales. Profits peak during this period only, but start to decline at the end. Success breeds imitation and more and more of competitors enter. Growth will continue until too many competitors enter the fray and the market gets saturated. Heavy advertising and other promotions are still required to develop market loyalty.
3. Maturity:
Maturity stage of life cycle is the longest period in the life of a product. The sales in the beginning go on increasing and peak before starting to decline at the end of this stage. Most of the people buy for their replacement demand only. It is difficult to tell the difference between the products as most of the products have the same features, advantages and benefits. Competition can get nasty. Persuasive promotion becomes more important at this stage of PLC.
4. Decline:
Sales further decreases, which may be due to change in consumer tastes, technological change, changing economic scenario, entry of too many competitors, or market saturation. New products become more attractive, even lowest price no more attracts.