Strategies for each stage of PLC

The major use of the product life cycle concept in strategic market planning is based on the notion that characteristics of each stage of the life cycle lend themselves to particular objectives and strategies. We examine this by tracing through each of the stages.


Introductory stage

At this stage, awareness of the new product is low, and competitors are few or non-existent. Considerable effort may have to be made to bring the product to the attention of distributors and consumers. Marketing efforts are likely to be focused on informing customers and promotional and distribution elements of the marketing mix will be targeted at innovator categories. Pricing strategies can be aimed either at ‘skimming’ the market through high initial prices that gradually reduce, or at ‘market penetration’, aiming to achieve high levels of market share quickly through low prices. Distribution will tend to be exclusive or selective, and advertising aimed at building awareness.


Very often in India, it is noticed that a product is advertised but is not available at the distribution outlets. This is a waste of promotional expenses. We must make optimum use of the available resources of the organization. Thus distribution should be arranged before the product is launched.


Growth stage

When the sales shoot up and we are satisfied with the profit generated by the product, competitors will now enter the market and perhaps offer new product features. Therefore, we may have to think of improving our product so that we do not reach the ultimate `decline’ stage too quickly


If the new product is successful, we can expect a rapid growth in sales. During this stage new competitors are expected to enter the market and marketing strategies will need to be focused on combating these new entrants. Although price wars are unlikely to develop at this early stage, considerable effort may be required to establish the intensive distribution required for ultimate mass market demand. Communications will be aimed at creating brand image. The promotional expenditure should maintained at the same level or is raised slightly in order to meet competition.


Maturity stage

This stage generally lasts longer than the other stages and poses problems for the management in maintaining the sales level. Actually, there is a slowdown in the growth rate of the sales in case of such matured products


Competition is at its peak. Market share needs defending, while at the same time preserving profit levels. Brand preferences and loyalties are likely to be already established by this stage, but there is likely to be considerable emphasis on trying to encourage brand switching through sales promotion. Price reductions feature here and distribution efforts are aimed at maintaining dealer relationships.


Decline stage

Sales promotion may be reduced to a minimum as the market shrinks. Price competition and price cutting are likely to be intense. Emphasis is likely to switch either to looking for ways to extend the product life cycle or to new products, with the old product being ‘milked’ for profits.

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