Product Life Cycle (PLC curve)

As a marketer, how will you decide when to advertise, when to reduce the price, when to invest in research and when to delist a product?

As a marketer, we have to decide a lot of things about a product, such as its marketing and advertisement, packaging, price, exploration of new markets and even more.
 Marketers use the concept of PRODUCT LIFE CYCLE for this.


Fig. 4 Stages of Product Life Cycle

The above graph is known as the PLC curve. It describes the sales volume of a product at 4 different stages of it. These stages are the following:

Introduction Stage – This is the initial stage of a product. Relative market share for the product is low initially, and that’s why sales volume is low. As there is a lot of research needed, this stage is very costly to the company.

Growth Stage – In this stage, the product is now known in the market. Its sales increases and the need for R&D decreases. So, it starts becoming profitable for the company now. This is the time when managers must invest money to increase its marketing in order to increase the sales further.

Maturity Stage – In this stage, the sales of the product stabilize slowly. The challenge for the marketer now is to maintain the market share. This is the time when most of the weak products go out of the competition. So, it is required for a marketer to invest in R&D or marketing only if it gives a competitive advantage to it over its substitutes or other similar products.

Decline Stage – The sales start declining at this stage. Now comes the ‘war of prices’. Consumers don’t have much of a reason to purchase the product other than low prices at this stage. This decline could be because of market saturation or a new and better product (Like Floppy Disks declined due to the entry of CDs and DVDs, and then these declined after Pen Drives and Hard Disks’ introduction into the market).
Note:


·       It is not necessary that every product reaches the decline stage. Many products continue to grow if consumers still need them.

·       In some books, you may find 6 stages of PLC. They add ‘Development stage’ before introduction and ‘saturation stage’ before the decline. Actual PLC curve was introduced with only 4 stages. In the modern curve, these two stages have been separately added just to make it comparatively clearer to marketers.

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