GUPTA COLLEGE OF TECHNOLOGICAL SCIENCES

Ashram More, G. T. Road, Asansol-713301, West Bengal

ACADEMIC YEAR 2024-2025

NAME- SOUMEN KARMAKAR

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 PRODUCT LIFE CYCLE
The product life cycle is the length of time that a product is available to customers. It starts when
a product (a good or a service) is introduced into the market and ends when it's removed from the
shelves.
This concept is used by management and marketing professionals to make marketing and sales
decisions, such as whether or not to increase advertising, reduce prices, expand to new markets,
or redesign packaging. The process of strategizing ways to continuously support and maintain a
product is called product life cycle management.
How the Product Life Cycle Works
A product begins with an idea. Within the confines of modern business, that idea isn't likely to go
further until it undergoes research and development (R&D). If the business finds that it
is feasible and potentially profitable, the product will be produced, marketed, and rolled out.
The life cycle of a product is broken into four stages:
1. Introduction
2. Growth
3. Maturity
4. Decline
Introduction Stage
The introduction phase is the first time customers are introduced to the new product. This stage
generally requires that the business make a substantial investment in advertising. At this point,
the marketing is focused on making consumers aware of the product and its benefits, especially
if it is broadly unknown what the item will do.

During the introduction stage, there may be little or no competition for a product, as competitors
may just be getting a first look at the new offering. Even if the business is offering a new
product or service in response to another business's sales, the marketing will still be focused on
introducing the new product rather than on differentiating it from competitors' products.

Companies often experience negative financial results at this stage. Sales tend to be lower,
promotional pricing may be low to drive customer engagement, marketing spending is high, and
the sales strategy is still being evaluated.

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Growth Stage

If the product is successful, it then moves to the growth stage. This is characterized by:

• Growing demand
• Increase in production
• Expanded availability

During the growth phase, the product becomes more popular and recognizable. A company may
still choose to invest heavily in advertising if the product faces heavy competition. However,
marketing campaigns will likely be geared towards differentiating its product from others as
opposed to introducing the goods to the market. A company may also refine its product by
improving functionality based on customer feedback.

Financially, the growth period of the product life cycle results in increased sales and higher
revenue. As peer businesses begin to offer rival products, competition increases, potentially
forcing the company to decrease prices and experience lower margins.

Maturity Stage

The maturity stage of the product life cycle is the most profitable stage, the time when the costs
of producing and marketing decline. With the market saturated with the product, competition is
now higher than at other stages, and profit margins start to shrink. Some analysts refer to the
maturity stage as when sales volume is "maxed out."

Depending on the good, a company may begin deciding how to innovate its product or
introduce new ways to capture a larger market presence. This includes getting more feedback
from customers and researching their demographics and their needs.

During the maturity stage, competition is at the highest level. Rival companies have had enough
time to introduce competing and improved products, and competition for customers is usually
highest. Sales levels stabilize, and a company strives to have its product exist in this maturity
stage for as long as possible.

Decline Stage

As the product takes on increased competition and other companies emulate its success, the
product may lose market share. This is when the decline state begins.

Product sales begin to drop due to market saturation and alternative products. If customers have
already decided whether they are loyal to the product or prefer those of competitors, the
company may choose to not invest in additional marketing efforts. Should a product be entirely
retired, the company will stop generating support for it and will entirely phase out marketing
and production endeavors.

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Alternatively, the company may decide to revamp the product or introduce a next-generation,
completely overhauled model. If the upgrade is substantial enough, the company may choose to
re-enter the product life cycle by introducing the new version to the market.

Microsoft's decision to sunset Windows 8.1 in January 2023 was an example of the decline
stage. Consumers began receiving notifications the year before that Microsoft would no longer
support the product and instead would focus resources on newer technologies.

Benefits and Drawbacks of Using the Product Life Cycle

Benefits

• Clarify portfolio of offerings

Drawbacks

• Not appropriate for every industry or product

Benefits

The product life cycle better allows marketers and business developers to better understand how
each product or brand sits with a company's portfolio. This enables the company to internally
shift resources to specific products based on those products' positioning within the product life
cycle.

For example, a company may decide to reallocate marketing resources to products entering the
introduction or growth stages. Alternatively, it may need to invest more cost of labor in
engineers or customer service technicians as the product matures.

The product life cycle naturally tends to have a positive impact on economic growth, as it
promotes innovation and discourages supporting outdated products. As products move through
the life cycle stages, companies that track the product life cycle can be more aware of the need
to make their products more effective, safer, efficient, faster, cheaper, or better suited to client
needs.

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Drawbacks

Despite its utility for planning and analysis, the product life cycle doesn't apply to every
industry and doesn't work consistently across all products. Consider popular beverage lines
whose primary products have been in the maturity stage for decades, while spin-offs or
variations of these drinks from the same company have failed.

The product life cycle also may be artificial in industries with legal or trademark restrictions.
Consider the new patent term in the United States, which is 20 years from when the application
for the patent was filed.2 A drug may be adversely impacted by competition when its patent
ends regardless of which life cycle stage it is in.

Another unfortunate side effect of the product life cycle is prospective or planned obsolescence.
When a product enters the maturity stage, a company may be tempted to begin planning its
replacement. This may be the case even if the existing product still holds many benefits for
customers and could continue to have a long shelf life. For producers who tend to introduce new
products every few years, this can lead to product waste and inefficient use of product
development resources.

Product Life Cycle vs. BCG Matrix

A similar analytical tool to help businesses determine the market positioning of a product is
the Boston Consulting Group (BCG) Matrix. This four-square table defines products based on
their market growth and market share:

• Stars: Products with high market growth and high market share
• Cash cows: Products with low market growth and high market share
• Question marks or problem children: Products with high market growth and low
market share
• Dogs: Products with low market growth and low market share

Both systems analyze a product's market growth and saturation. However, the BCG Matrix does
not traditionally communicate the direction in which a product will move. For example, a
product that has entered the maturity stage of the product life cycle will likely experience
decline next; the BCG Matrix does not communicate this product flow in its visual depiction.

Special Considerations

Impact on Innovation

Companies that have a good handle on all four stages can increase profitability and maximize
their returns. Those that aren't able to may experience an increase in their marketing and
production costs, ultimately leading to the limited shelf life for their products.

In 1965, Theodore Levitt, a marketing professor, wrote in the Harvard Business Review that the
innovator is the one with the most to lose because so many truly new products fail at the first

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phase of their life cycle—the introductory stage. The failure comes only after the investment of
substantial money and time into research, development, and production. This fact prevents
many companies from trying many new ideas. Instead, he said, they wait for someone else to
succeed and then clone the success.3

Harvard Business Review. "Exploit the Product Life Cycle."

Stages Within an Industry

In an established industry, products will exist at all stages of the life cycle, influenced by other
products that have recently become available. For example, in television program distribution,
OLED TVs are in the mature phase, programming-on-demand is in the growth stage, DVDs are
in decline, and the videocassette is extinct.

Prolonging the Mature Stage

Many of the most successful products on earth are suspended in the mature stage for as long as
possible, undergoing minor updates and redesigns to keep them differentiated. Examples
include:

• Apple computers and iPhones

All of these products undergo minor changes accompanied by major marketing efforts, which
are designed to keep them feeling unique and special in the eyes of consumers.

Examples of the Product Life Cycle

Many brands that were American icons have gone through the entirety of the product life cycle,
reaching their decline for a variety of different reasons. In some cases, better management of
product life cycles might have prolonged their availability. In others, the company faced steep
competition or the product didn't resonate with customers.

Oldsmobile

Oldsmobile began producing cars in 1897. After merging with General Motors in 1908, the
company used the first V-8 engine in 1916. By 1935, the one millionth Oldsmobile had been
built. In 1984, Oldsmobile sales peaked, selling more cars in that year than any other year. By
2000, General Motors announced it would phase out the automobile and, on April 29th, 2004,
the last Oldsmobile was built.4

Woolworth Co.

In 1905, Frank Winfield Woolworth incorporated F.W. Woolworth Co., a general merchandise
retail store. By 1929, Woolworth had about 2,250 outlet stores across the United States and

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Britain, Decades later, due to increased competition from other discount retailors, Woolworth
closed the last of its variety stores in the United States in 1997 to increasingly focus on sporting
goods.5

Coca-Cola

On April 23, 1985, Coca-Cola announced a new formula for its popular beverage, referred to as
"new Coke." Coca-Cola's market-share lead had been decreasing over the past 15 years, and the
company decided to launch a new recipe in hopes of reinvigorating product interest. After its
launch, Coca-Cola's phone line began receiving 1,500 calls per day, many of which were to
complain about the change. Protest groups recruited 100,000 individuals to support their cause
of bringing "old" Coke back.6

A stunning 79 days after its launch, "new Coke's" full product life cycle was complete. Though
the product didn't experience much growth or maturity, its introduction to the market was met
with heavy protest. Less than three months after it announced its new recipe, Coca-Cola
announced it would revert its product back to the original recipe.

Conclusion
In conclusion, the Product Life Cycle (PLC) is a fundamental concept in marketing that
highlights the stages a product goes through from its introduction to its eventual decline in the
market. Understanding and applying the PLC helps businesses optimize marketing strategies at
each stage, ensuring that they maximize the product's potential and profitability.

References
1. Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson Education.
2. Armstrong, G., & Kotler, P. (2015). Marketing: An Introduction (12th ed.). Pearson
Education.
3. Mullen, P., & Williams, T. (2004). Product Life Cycle: A Tool for Strategic Marketing.
Journal of Strategic Marketing, 12(1), 25-38.

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