Product Life Cycle Model Assumptions
At the core of the PLC Model are the following simple assumptions:
- • All products have limited life spans.
- • Product sales pass through different and distinct stages.
- • Each stage presents a different challenge, which calls for the application of a customized marketing mix.
Product Life Cycle Model Stages
A PLC is traditionally viewed, from a marketing perspective, as being comprised of four distinct stages: introduction, growth, maturity, and decline (Fig. 9.1).
In the Introduction stage, the product is introduced to the market through a focused and intense marketing effort designed to establish a clear identity and promote maximum awareness. Many trial or impulse purchases will occur at this stage. Next, consumer interest will bring about the Growth stage, distinguished by increasing sales and the emergence of competitors. The growth stage is also characterized by sustaining marketing activities on the vendor’s side, with consumers engaged in repeat purchase behavior patterns. Arrival of the product’s Maturity stage is evident when competitors begin to leave the market, sales velocity is dramatically reduced, and sales volume reaches a steady state. At this point in time, mostly loyal consumers purchase the product. A continuous decline in sales signals entry into the Decline stage. The lingering effects of competition, unfavorable economic conditions, new fashion trends, etc. often explain the decline in sales.
Fig. 9.1 Product life cycle model stages
Reasons for Extending the PLC
Understanding and extending the PLC stages allows a company to fully exploit market opportunities, and defend or establish a competitive advantage through a lasting market presence. The main business reason for extending the PLC is to gain more sales through longer presence in the marketplace. The main marketing reason is, since not all consumers are alike, certain consumer types will adopt a product at different stages of the product life cycle. By extending each stage of the PLC there is a better chance of exposure to the relevant consumer group. Extending the PLC should not be confused with extending the life of the product, which applies to enhanced durability, reliability, or technical quality.