What is the meaning of product life cycle?

Answer 1

The product life cycle goes through many phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures; To say that a product has a life cycle is to assert four things: 1) that products have a limited life, 2) product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, 3) profits rise and fall at different stages of product life cycle, and 4) products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

The different stages in a product life cycle are:

1. Market introduction stage #:* cost high
   • sales volume low
   • no/little competition - competitive manufacturers watch for acceptance/segment growth losses
   • demand has to be created
   • customers have to be prompted to try the product
2. Growth stage #:* costs reduced due to economies of scale
   • sales volume increases significantly
   • profitability
   • public awareness
   • competition begins to increase with a few new players in establishing market
   • prices to maximize market share
3. Mature stage #:* Costs are very low as you are well established in market & no need for publicity.
   • sales volume peaks
   • increase in competitive offerings
   • prices tend to drop due to the proliferation of competing products
   • brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered
   • Industrial profits go down
4. Saturation and decline stage #:* costs become counter-optimal
   • sales volume decline or stabilize
   • prices, profitability diminish
   • profit becomes more a challenge of production/distribution efficiency than increased sales