Product Life-Cycle Marketing Strategies
A company’s positioning and differentiation strategy must change as its product, market, and competitors change over the product life cycle (PLC). To say a product has a life cycle is to assert four things: (1) products have a limited life, (2) product sales pass through distinct stages, each posing different marketing challenges and opportunities, (3) profits rise and fall at different stages, and (4) products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each stage.
Product Life Cycles
Most product life cycles are portrayed as bell-shaped curves (see Figure 9.5), typically divided into four stages: introduction, growth, maturity, and decline. In introduction, sales grow slowly as the product is introduced; profits are nonexistent because of the heavy introductory expenses. Growth is a period of rapid market acceptance and substantial profit improvement. In maturity, sales growth slows because the product has achieved acceptance by most potential buyers, and profits stabilize or decline because of increased competition. In decline, sales drift downward and profits erode.