Product life cycle is made based on the biological life cycle. Most projects goes through similar stages on the path from origin to completion. Johnson (2012) stated that product life cycle (PLC) is a trend whereby a brand new and original product become out-of-date and gradually obsolete (Johnson, 2012). There are four major phases in the project life cycle as shown in Figure 1 (refer to Appendix). These major phases are introduction stage, growth stage, maturity stage and decline stage. The product life cycle starts with the introduction stage.
During this stage, marketing strategies change from time to time to meet market demand in relation to its competition, pricing, distribution, promotion and market information to ensure that marketers can maintain profitable product mixes. As mentioned by Pride et al. (2007), “the introduction stage of the product life cycle begins at a product’s first appearance in the marketplace” (p. 205). In other words, the sales are at zero point and profits are negative because the customers have not known about the product. In a typical profit versus time graph for a product life cycle, the shape resembles the letter “s”.
Profits are below zero point because the revenues are low and the manufacturer generally must cover large expenses for product development, promotion and distribution. Introduction stage commonly starts with promoting the new products (Pride et al. , 2007, p. 205). Potential buyers should be given details about the new product’s features, uses and advantages. To achieve this, the seller should have adequate amount of resource, technological knowledge and marketing know-how to launch the product successfully. Giving free samples, gain visibility through media appearances are among the most popular ways of advertising products.
Considerable research and development fee might have been paid to get the product to introduction phase (Marketing – Products – Product life cycle, 2012). The initial product price should be high to recoup expensive market research and development cost. These obstacles are among the reason why many products can never survive the introduction stage. Most of the new products start off slowly and seldom generate enough profit to bring immediate profits. Pride et al. (2007) says that seller should be alert for any weakness or disadvantages that customers reported.
Improvements must be made immediately to prevent the product’s early demise and loses in customer interest. As the sales move upwards, the break-even point is reach and competitors enter the market, the growth stage begins. For example, a new laptop brand entered the market always loses in terms of profit. This company can promote the product before the launch date so that customer can get to know the product and anticipate the launching of the product. Once the introductory phases have taken place, the growth stage begins.
The growth stage is the stage in which one product is being accepted and it is a period of rapid revenue growth. Its’ goal is to encourage brand loyalty. According to Komninos (2002), the growth stage derives the contentment of seeing the product rolled out and become popular in the market place and in fact it is a suitable period in which the market share of that particular product can be fully-controlled and risen (Komninos, 2002). Once the product has been successfully gained popularity among the society, the demand in the market increase at the same time.
Hence, the sales increase further as more customers and retailers are interested in it. For instance, the high demand for Asus laptop in Malaysia has increased substantially with increased access to wireless technology and lighter weight. Laptops have also become easier and cheaper to produce as new technology has come online. Consequently, the sales volume of Asus laptops increase significantly and the companies gain profits as they fulfill the economies of scale which in turn resulted in the reducing price of Asus laptop, despite the shift of demand.
When price falls, quantity supplied decreases and quantity demanded increases until an equilibrium price is reached where quantity supplied and quantity demanded are equal (Karl, Ray, & Sharon, 2009, p. 104). Besides that, at this growth stage also, competition automatically begins in the establishing market. This is because when the sales of one laptop brand surplus the expected demands, it alerts the other competitiors’ attention. For that reason, they are pulled into the business and usually appeared with the same products (The product life cycle, n. . ). When competitors such as HP, Toshiba, Dell, Sony, Lenovo and so forth start to enter the market place, price competition may occur. Meanwhile, there may be frequent promotional costs in order to attract more consumers to buy their products and persuade them that the company’s product is better than others. Taking Asus laptop as example, the company often distinguish their laptop, make sure they are incomparable from the competitors ones and always perform at maximum efficiency.
Komninos (2002) stated that in order to prevent the competitors from gaining market share by copying or offering the same goods, repeated modification process of the product is needed. Next, the company can stringent the rules and regulations that must be obeyed. For instance, licenses, copyrights, product complexity and low availability of product components to control the infringement of copyright. Finally, heavy promotions such as trade shows, sales seminars and press releases may continue but they are oriented towards the market leadership and not in gaining product awareness in the introductory phase (Komninos 2002).
All these are crucial as the clients’ requirement can be met which in turn gain their confidence. Wide and better scopes in all market places are worthwhile goal throughout the growth phase. Tibbem-Lembke (2002) mentioned that the growth stage also allows the firm to identify the problem of a product as well as dealing with it in any situations (Tibben-Lembke, 2002). Managing well the growth stage is essential and it gives big impact to the product itself as well as the firm. The product life cycle then proceeds to the maturity stage. As highlighted by Solomon, Marshall and Stuart (2011, p. 78) define maturity stage as “the third and longest stage in the product life cycle, during which sales peak and profit margins narrow. ” Kotler and Armstrong (2012, p. 301) stipulated that company need to pay attention at this stage because product enter maturity stage when product’s sales growth start to slow down. This situation may lead to stronger competition in the market. Competitor may focus on their advertising, increase sales promotions, adds new features on product and improvement of production development in the competition.
Some of the stronger company stay and some may monopolize the market but the weaker competitor start to drop out from market. On the other hand, customers have known and accepted the product at this stage (Solomon et al. , 2011, p. 278). Most of the products in the market are in this maturity stage therefore marketers face challenges with the mature product. As marketers, they always develop creative, innovative and attractive advertising news that work up consumers to know that their present state just does not equivalent to their desired state to make an actual need arises.
The most important thing is to meet customer’s need. Kotler and Armstrong (2012, p. 301) stated company might try to “modify market, product and marketing mix” to avoid the product enter the decline stage. It is important for company to find new customer to use their product and new market segment such as men or women, adult or child and student and non-student to increase the population of product in modifying the market (Kotler & Armstrong, 2012, p. 301). For instance, the people who need a laptop are usually a student such as college or university students.
As asserted by Kotler and Armstrong (2012, p. 302) modifying product such as changing the characteristics such as quality of product, add new features, or new packaging to make the product more attractive and modifying the marketing mix such as change once or more marketing mix may attract new customer to company and improve the performance of the product (Kotler & Armstrong, 2012, p. 302). For example, a mature product such as a laptop in the market, company should maintain the price, increase the quality such as processor of the laptop and offer new or improve the after sales service to customer.
In addition, the company should change into new marketing strategy to help the new users instead of focus on pricing and promotion. Product normally earns the most in the Maturity stage; however, some product might not face the same fate and ended up in the decline stage. Decline stage is also known as a stage where the market of the product starts to downfall as well as the earnings of the sale. According to Kotler and Armstrong (2012, p. 302), there are many reasons for the product to face the decline stage including technological upgrades, shifts in consumer taste and more number of competition.
In this case, the laptop might soon face “extinction” as smart phones and tablet PC are dominating the society. Both devices have the ability to perform like a normal laptop can and some might be better such as one of the tablet PC that the Apple Inc. invented, The New iPad. Due to this fact, the management might take the step to maintain the product. The laptop faces competition with other brands although it is the pioneer of the product. Laptop is accepted as the pioneer of mobile personal computer and everything change as device get improved, additional system and function added in order to compete with the laptop.
This lead to the invention of tablet PC as consumer demands mobility and functionality. Eventually the laptop become obsolete compared to the tablet PC. Therefore, repositioning the strategy of the sale hoping it can go back into the growth stage of the Product Life Cycle (Kotler & Armstrong, 2012, p. 303). Repositioning is in improving and upgrade the laptop ergonomically design as well as the operating system to be futuristic. If the management fail to maintain the product, the next step they can take is to harvest the product in which according to Kotler and Armstrong (2012, p. 03) means reducing the costs of all aspects including material, equipment, research and advertising, hoping that sales being able to maintain the sales and if success, it might compensate the lost as well as increase the earnings of the company in a short period of time. Finally, the management might decide to discontinue the product from its current line. The product eventually become unprofitable hence, the management might stop producing it for selling it in the market (Kotler & Armstrong, 2012, p. 303).
However, the product only survives in the market as collector’s item. Some collectors are interested in these kinds of product and they buy these products to be part of their collections (The Product Life Cycle, 2012). References Johnson, P. (2012). Product life cycle theory. Retrieved from http://www. buzzle. com/articles/product-life-cycle-theory. html Karl, E. C. , Ray, C. F. , & Sharon, M. O. , (2009). Principles of economies (9th ed. ). USA: Pearson Education, Inc. Komninos, I. (2002). Product life cycle management. Retrieved from http://www. renio. org/tools/en/Product_Life_Cycle_Management. pdf Kotler, P. , & Armstrong, G. (2012). Principles of marketing: An Asian perspective (14th ed. ).
Harlow, England: Pearson Education. Marketing – products – product life cycle. Retrieved July 17, 2012, from http://tutor2u. net/business/marketing/products_lifecycle. asp. Pride W. , Elliott G. , Rundle-Thiele S. , Waller D. , Paladino A. , & Ferrell O. (2007). Marketing Core Concepts & Applications Asia-Pacific edition (2nd ed. ). Milton Qld: John Wiley & Sons Australia, Ltd. Solomon, M. R. MProduct life cycle is made based on the biological life cycle. Most projects goes through similar stages on the path from origin to completion. Johnson (2012) stated that product life cycle (PLC) is a trend whereby a brand new and original product become out-of-date and gradually obsolete (Johnson, 2012). There are four major phases in the project life cycle as shown in Figure 1 (refer to Appendix). These major phases are introduction stage, growth stage, maturity stage and decline stage. The product life cycle starts with the introduction stage.
During this stage, marketing strategies change from time to time to meet market demand in relation to its competition, pricing, distribution, promotion and market information to ensure that marketers can maintain profitable product mixes. As mentioned by Pride et al. (2007), “the introduction stage of the product life cycle begins at a product’s first appearance in the marketplace” (p. 205). In other words, the sales are at zero point and profits are negative because the customers have not known about the product. In a typical profit versus time graph for a product life cycle, the shape resembles the letter “s”.
Profits are below zero point because the revenues are low and the manufacturer generally must cover large expenses for product development, promotion and distribution. Introduction stage commonly starts with promoting the new products (Pride et al. , 2007, p. 205). Potential buyers should be given details about the new product’s features, uses and advantages. To achieve this, the seller should have adequate amount of resource, technological knowledge and marketing know-how to launch the product successfully. Giving free samples, gain visibility through media appearances are among the most popular ways of advertising products.
Considerable research and development fee might have been paid to get the product to introduction phase (Marketing – Products – Product life cycle, 2012). The initial product price should be high to recoup expensive market research and development cost. These obstacles are among the reason why many products can never survive the introduction stage. Most of the new products start off slowly and seldom generate enough profit to bring immediate profits. Pride et al. (2007) says that seller should be alert for any weakness or disadvantages that customers reported.
Improvements must be made immediately to prevent the product’s early demise and loses in customer interest. As the sales move upwards, the break-even point is reach and competitors enter the market, the growth stage begins. For example, a new laptop brand entered the market always loses in terms of profit. This company can promote the product before the launch date so that customer can get to know the product and anticipate the launching of the product. Once the introductory phases have taken place, the growth stage begins.
The growth stage is the stage in which one product is being accepted and it is a period of rapid revenue growth. Its’ goal is to encourage brand loyalty. According to Komninos (2002), the growth stage derives the contentment of seeing the product rolled out and become popular in the market place and in fact it is a suitable period in which the market share of that particular product can be fully-controlled and risen (Komninos, 2002). Once the product has been successfully gained popularity among the society, the demand in the market increase at the same time.
Hence, the sales increase further as more customers and retailers are interested in it. For instance, the high demand for Asus laptop in Malaysia has increased substantially with increased access to wireless technology and lighter weight. Laptops have also become easier and cheaper to produce as new technology has come online. Consequently, the sales volume of Asus laptops increase significantly and the companies gain profits as they fulfill the economies of scale which in turn resulted in the reducing price of Asus laptop, despite the shift of demand.
When price falls, quantity supplied decreases and quantity demanded increases until an equilibrium price is reached where quantity supplied and quantity demanded are equal (Karl, Ray, & Sharon, 2009, p. 104). Besides that, at this growth stage also, competition automatically begins in the establishing market. This is because when the sales of one laptop brand surplus the expected demands, it alerts the other competitiors’ attention. For that reason, they are pulled into the business and usually appeared with the same products (The product life cycle, n. . ). When competitors such as HP, Toshiba, Dell, Sony, Lenovo and so forth start to enter the market place, price competition may occur. Meanwhile, there may be frequent promotional costs in order to attract more consumers to buy their products and persuade them that the company’s product is better than others. Taking Asus laptop as example, the company often distinguish their laptop, make sure they are incomparable from the competitors ones and always perform at maximum efficiency.
Komninos (2002) stated that in order to prevent the competitors from gaining market share by copying or offering the same goods, repeated modification process of the product is needed. Next, the company can stringent the rules and regulations that must be obeyed. For instance, licenses, copyrights, product complexity and low availability of product components to control the infringement of copyright. Finally, heavy promotions such as trade shows, sales seminars and press releases may continue but they are oriented towards the market leadership and not in gaining product awareness in the introductory phase (Komninos 2002).
All these are crucial as the clients’ requirement can be met which in turn gain their confidence. Wide and better scopes in all market places are worthwhile goal throughout the growth phase. Tibbem-Lembke (2002) mentioned that the growth stage also allows the firm to identify the problem of a product as well as dealing with it in any situations (Tibben-Lembke, 2002). Managing well the growth stage is essential and it gives big impact to the product itself as well as the firm. The product life cycle then proceeds to the maturity stage. As highlighted by Solomon, Marshall and Stuart (2011, p. 78) define maturity stage as “the third and longest stage in the product life cycle, during which sales peak and profit margins narrow. ” Kotler and Armstrong (2012, p. 301) stipulated that company need to pay attention at this stage because product enter maturity stage when product’s sales growth start to slow down. This situation may lead to stronger competition in the market. Competitor may focus on their advertising, increase sales promotions, adds new features on product and improvement of production development in the competition.
Some of the stronger company stay and some may monopolize the market but the weaker competitor start to drop out from market. On the other hand, customers have known and accepted the product at this stage (Solomon et al. , 2011, p. 278). Most of the products in the market are in this maturity stage therefore marketers face challenges with the mature product. As marketers, they always develop creative, innovative and attractive advertising news that work up consumers to know that their present state just does not quivalent to their desired state to make an actual need arises.
The most important thing is to meet customer’s need. Kotler and Armstrong (2012, p. 301) stated company might try to “modify market, product and marketing mix” to avoid the product enter the decline stage. It is important for company to find new customer to use their product and new market segment such as men or women, adult or child and student and non-student to increase the population of product in modifying the market (Kotler & Armstrong, 2012, p. 01). For instance, the people who need a laptop are usually a student such as college or university students. As asserted by Kotler and Armstrong (2012, p. 302) modifying product such as changing the characteristics such as quality of product, add new features, or new packaging to make the product more attractive and modifying the marketing mix such as change once or more marketing mix may attract new customer to company and improve the performance of the product (Kotler & Armstrong, 2012, p. 302).
For example, a mature product such as a laptop in the market, company should maintain the price, increase the quality such as processor of the laptop and offer new or improve the after sales service to customer. In addition, the company should change into new marketing strategy to help the new users instead of focus on pricing and promotion. Product normally earns the most in the Maturity stage; however, some product might not face the same fate and ended up in the decline stage. Decline stage is also known as a stage where the market of the product starts to downfall as well as the earnings of the sale.
According to Kotler and Armstrong (2012, p. 302), there are many reasons for the product to face the decline stage including technological upgrades, shifts in consumer taste and more number of competition. In this case, the laptop might soon face “extinction” as smart phones and tablet PC are dominating the society. Both devices have the ability to perform like a normal laptop can and some might be better such as one of the tablet PC that the Apple Inc. invented, The New iPad. Due to this fact, the management might take the step to maintain the product.
The laptop faces competition with other brands although it is the pioneer of the product. Laptop is accepted as the pioneer of mobile personal computer and everything change as device get improved, additional system and function added in order to compete with the laptop. This lead to the invention of tablet PC as consumer demands mobility and functionality. Eventually the laptop become obsolete compared to the tablet PC. Therefore, repositioning the strategy of the sale hoping it can go back into the growth stage of the Product Life Cycle (Kotler & Armstrong, 2012, p. 03). Repositioning is in improving and upgrade the laptop ergonomically design as well as the operating system to be futuristic. If the management fail to maintain the product, the next step they can take is to harvest the product in which according to Kotler and Armstrong (2012, p. 303) means reducing the costs of all aspects including material, equipment, research and advertising, hoping that sales being able to maintain the sales and if success, it might compensate the lost as well as increase the earnings of the company in a short period of time.
Finally, the management might decide to discontinue the product from its current line. The product eventually become unprofitable hence, the management might stop producing it for selling it in the market (Kotler & Armstrong, 2012, p. 303). However, the product only survives in the market as collector’s item. Some collectors are interested in these kinds of product and they buy these products to be part of their collections (The Product Life Cycle, 2012). rshall, G. W. , & Stuart, E. W. (2011). Marketing: Real people real choice (7th ed. ).
New Jersey: Pearson Education. The product life cycle. (n. d). Retrieved July 11, 2012, from http://www. marketingteacher. com/lesson-store/lesson-plc. html# The product life cycle. (2012). Retrieved from http://www. ukessays. com/mba/marketing/product-life-cycle. php Tibben-Lembke, R. S. (2002). Life after death: reverse logistics and the product life cycle. International Journal of Physical Distribution & Logistics Management, 32(3), 223 – 244 William D. & McCarthy J. E. (1997). Product life cycle: Essentials of marketing. New York: Richard D Irwin Company.
References
Johnson, P. (2012). Product life cycle theory. Retrieved from http://www.buzzle.com/articles/product-life-cycle-theory.html
Karl, E. C., Ray, C. F., & Sharon, M. O., (2009). Principles of economies (9th ed.). USA: Pearson Education, Inc.
Komninos, I. (2002). Product life cycle management. Retrieved from http://www.urenio.org/tools/en/Product_Life_Cycle_Management.pdf
Kotler, P., & Armstrong, G. (2012). Principles of marketing: An Asian perspective (14th ed.). Harlow, England: Pearson Education.
Marketing – products – product life cycle. Retrieved July 17, 2012, from http://tutor2u.net/business/marketing/products_lifecycle.asp.
Pride W., Elliott G., Rundle-Thiele S., Waller D., Paladino A., & Ferrell
O. (2007). Marketing Core Concepts & Applications Asia-Pacific edition (2nd ed.). Milton Qld: John Wiley & Sons Australia, Ltd.
Solomon, M. R., Marshall, G. W., & Stuart, E. W. (2011). Marketing: Real people real choice (7th ed.). New Jersey: Pearson Education.
The product life cycle. (n.d). Retrieved July 11, 2012, from http://www.marketingteacher.com/lesson-store/lesson-plc.html#
The product life cycle. (2012).
Retrieved from http://www.ukessays.com/mba/marketing/product-life-cycle.php Tibben-Lembke, R. S. (2002). Life after death: reverse logistics and the product life cycle. International Journal of Physical Distribution & Logistics Management, 32(3), 223 – 244
William D. & McCarthy J. E. (1997). Product life cycle: Essentials of marketing. New York: Richard D Irwin Company.
