PLC Stages
Intro
→Growth
→Maturity
→Decline
In This Article
Introduction
The Product Life Cycle (PLC) describes the stages a product goes through from introduction to withdrawal from the market. Understanding where a product is in its life cycle helps marketers develop appropriate strategies for pricing, promotion, distribution, and product modifications.
Stage 1: Introduction
| Characteristic | Description |
|---|---|
| Sales | Low, slow growth |
| Profits | Negative (high costs, low volume) |
| Customers | Innovators (2.5% of market) |
| Competition | Few or none |
| Focus | Product awareness, trial |
Strategies
- Skimming: High price to recover R&D costs
- Penetration: Low price to build market share
- Heavy promotion: Create awareness
- Selective distribution: Build selectively
Stage 2: Growth
| Characteristic | Description |
|---|---|
| Sales | Rapidly increasing |
| Profits | Increasing, peak at end of stage |
| Customers | Early adopters (13.5%) |
| Competition | Growing number of competitors |
| Focus | Market share, brand preference |
Strategies
- Improve product quality, add features
- Add new models and variants
- Enter new market segments
- Increase distribution coverage
- Shift from awareness to preference advertising
- Lower prices to attract price-sensitive buyers
Stage 3: Maturity
| Characteristic | Description |
|---|---|
| Sales | Peak, then plateau or slow decline |
| Profits | Declining (price competition) |
| Customers | Early & late majority (68%) |
| Competition | Intense, weaker players exit |
| Focus | Defend share, maximize profit |
Strategies
- Market modification: New users, new uses, more usage
- Product modification: Quality, features, style improvements
- Marketing mix modification: Adjust price, distribution, promotion
- Focus on differentiation
- Cost reduction for profitability
Stage 4: Decline
| Characteristic | Description |
|---|---|
| Sales | Declining |
| Profits | Low or negative |
| Customers | Laggards (16%) |
| Competition | Declining number |
| Focus | Decide: maintain, harvest, or divest |
Strategic Options
- Maintain: Continue if still profitable
- Harvest: Reduce costs, milk remaining sales
- Divest: Sell or discontinue
- Revitalize: Find new markets or uses (rare success)
Strategic Implications Summary
Marketing Mix Changes Across Stages:
Product: Basic → Enhanced → Differentiated → Rationalized
Price: High/Low → Lower → Lowest → Rising
Promotion: Awareness → Preference → Loyalty → Minimal
Distribution: Selective → Intensive → Intensive → Selective
Product: Basic → Enhanced → Differentiated → Rationalized
Price: High/Low → Lower → Lowest → Rising
Promotion: Awareness → Preference → Loyalty → Minimal
Distribution: Selective → Intensive → Intensive → Selective
Conclusion
Key Takeaways
- Products pass through four stages: Introduction, Growth, Maturity, Decline
- Introduction: Build awareness, losses are expected
- Growth: Maximize market share, profits peak
- Maturity: Defend share, differentiate, extend life cycle
- Decline: Decide to maintain, harvest, or divest
- Marketing strategies must adapt to each stage
- PLC length varies by product category and industry