Meaning Of Product Life Cycle
Products are like living beings; they are conceived, born, grow, achieve maturity and finally die. During the conception and development phase, the product is in their pre-natal stage that is explained by the new product development process. After its introduction into the market and until its final elimination it passes through four stages; introduction, growth, maturity and decline.
This process through which products grow over the years, achieves maturity, and finally decline and die is known as product life cycle.
The product life cycle depicts the sales and profit history of a product over a period of time. The sales history of the product is presented graphically in the form of a S shaped curve. Different stages of product life cycle shows different growth rates of sales and profit from a product.
The product life cycle is based on the following assumptions:
Every product has a limited life span. Different products have different life span. Some die within a month and some other live for hundreds of years. Products have limited life because of changes in consumers' tastes and preferences and change in technology.
Although the consumer need, technology, and brands also have their own life cycle, the product life cycle analysis is conducted at the level of a product category such as automobiles, personal computers, radios, television etc.
3. Different buyer groups buy products during different phases
The product life cycle concept is based on the theory of diffusion of innovation. When a new product is introduced into a market, initially a very small group of consumers tries the product, while other consumer groups adopt the product in later stages. This provides different sales volumes during different periods of time in a product's life time.
Some products linger in the introduction stage for a long time before they enter the growth stage. Other products like tea, coffee, and hoe beverages have undergone long maturity period. A fad related products such as hip-pop and rap music showed sleep growth and sleep decline without any maturity period. Fashion and style related products usually show a cycle-recycle pattern.
Change in the sales and profitability during the four stages of the product life cycle pose different challenges, problems and opportunities to the organization. In order to face the challenges and problems and to take benefit of the opportunities, the organization needs to implement separate marketing strategies in the four phase of the product life cycle.
This process through which products grow over the years, achieves maturity, and finally decline and die is known as product life cycle.
The product life cycle depicts the sales and profit history of a product over a period of time. The sales history of the product is presented graphically in the form of a S shaped curve. Different stages of product life cycle shows different growth rates of sales and profit from a product.
Assumptions Of Product Life Cycle
The product life cycle is based on the following assumptions:
1. Every product has a limited life
Every product has a limited life span. Different products have different life span. Some die within a month and some other live for hundreds of years. Products have limited life because of changes in consumers' tastes and preferences and change in technology.
2. Product life cycle analysis is conducted for a product category
Although the consumer need, technology, and brands also have their own life cycle, the product life cycle analysis is conducted at the level of a product category such as automobiles, personal computers, radios, television etc.
3. Different buyer groups buy products during different phases
The product life cycle concept is based on the theory of diffusion of innovation. When a new product is introduced into a market, initially a very small group of consumers tries the product, while other consumer groups adopt the product in later stages. This provides different sales volumes during different periods of time in a product's life time.
4. The shape of the product life cycle differs for different types of products
Some products linger in the introduction stage for a long time before they enter the growth stage. Other products like tea, coffee, and hoe beverages have undergone long maturity period. A fad related products such as hip-pop and rap music showed sleep growth and sleep decline without any maturity period. Fashion and style related products usually show a cycle-recycle pattern.
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5.The product life cycle stages require different marketing strategy
Change in the sales and profitability during the four stages of the product life cycle pose different challenges, problems and opportunities to the organization. In order to face the challenges and problems and to take benefit of the opportunities, the organization needs to implement separate marketing strategies in the four phase of the product life cycle.
