For example, when a market is no longer growing but the product is doing well (cash cow in the BCG approach), the company may decide to use the money from the cash cow to invest in other products they have rather than continuing to invest in the product in a no-growth market. Other tools such as the Boston Consulting Group matrix and the General Electric approach (see Chapter 2 “Strategic Planning” for discussion) may also be used to manage and make decisions about what to do with products. The PLC is a beneficial tool that helps marketers manage the stages of a product’s acceptance and success in the marketplace, beginning with the product’s introduction, its growth in market share, maturity, and possible decline in market share. Just as children go through different phases in life (toddler, elementary school, adolescent, young adult, and so on), products and services also age and go through different stages. The product life cycle (PLC) includes the stages the product goes through after development, from introduction to the end of the product. Other organizations, such as CocaCola, decide to compete in markets worldwide (1). Given many possible constraints in international markets, companies might initially introduce a product in limited areas abroad. Companies also need expertise to successfully launch products in foreign markets. Before introducing products in global markets, an organization must evaluate and understand factors in the external environment, including laws and regulations, the economy and stage of economic development, the competitors and substitutes, cultural values, and market needs. The process involves making many complex decisions, especially if the product is being introduced in global markets. Only if this is done will the product’s producer achieve its profit objectives and be able to sustain the offering in the marketplace. Once a product is created and introduced in the marketplace, the offering must be managed effectively for the customer to receive value from it. The 100 Calorie Packs offered by Nabisco proved to be extremely popular. Other recent new product introductions include many technological products such as Nintendo’s Wii, iPhones, and digital video recorders (DVRs) many new personal care products such as new fragrances of shampoo and conditioner and new flavors of toothpaste and new convenience foods such as frozen meals, “100 calorie pack” snacks, and cereal bars (Hunter, 2008). For example, in 2006 almost 1,400 food products making a “whole grain claim” were introduced (Roskelly, 2010). Over 20,000 new offerings, including convenience foods, health and beauty aids, electronics, automobiles, pharmaceutical products, hotels, restaurants, and so on, enter the marketplace each year. Explain the product life cycle and the objectives and strategies for each stage.Explain how managing an offering may be different in international markets.Explain how organizations manage offerings after being introduced to the marketplace.But the process is rarely easy.The objectives of this section is to help students … PLC also forces a continuous scan of the market and allows the company to take corrective action faster. Significance of PLC: PLC analysis, if done properly, can alert a company as to the health of the product in relation to the market it serves.
Price wars continue, several products are withdrawn and cost control becomes the way out for most products in this stage. Here, sales drop, as consumers may have changed, the product is no longer relevant or useful. In this stage, products get differentiated, price wars and sales promotion become common and a few weaker players exit. The third stage is maturity, where sales grow at slowing rates and finally stabilize. In this stage, sales take off, the market knows of the product other companies are attracted, profits begin to come in and market shares stabilize. The need is to create awareness, not profits. In this stage, there's heavy marketing activity, product promotion and the product is put into limited outlets in a few channels for distribution. Introduction: When the product is brought into the market. Definition: Product life cycle (PLC) is the cycle through which every product goes through from introduction to withdrawal or eventual demise.