Product Life Cycle (PLC) also known as the product life cycle or product life cycle is a concept that describes a series of journeys or stages that a product goes through, starting from the development stage, introduction until the product declines until it finally leaves the market.
The concept of product life cycle was first introduced by Levitt in 1965 in his article entitled Exploit The Product Life Cycle. A well-managed product life cycle will help marketers better able to maintain profitable products and discontinue unprofitable products.
The product life cycle is an important concept in marketing because it provides a deep understanding of the competitive dynamics of a product. A well-managed product life cycle will assist managers in ensuring that product introduction, modification and discontinuation is carried out in an appropriate manner.
Product Life Cycle Stages
According to Assauri (2004), the product life cycle is divided into four stages, namely: the introduction stage, the growth stage, the maturity stage and the decline stage. There are also those who classify it into introduction, growth, maturity, decline and termination. In addition, it is stated that the PLC stages consist of introduction (pioneering), rapid growth (market acceptance), slow growth (turbulence), maturity (saturation) and decline (obsolescence). Another opinion divides it into stages of introduction, growth, maturity, saturation and decline.
According to Tjiptono (1998), the stages of the product life cycle (PLC) are as follows:
- Introductory stage
The introduction stage is a period of slow sales growth when the product is introduced to the market. The general characteristics of this stage are low sales, slow growing market volume (due to high market resistance), relatively little competition, relatively high failure rate, many product modifications are still being made in testing and development, very high production and marketing costs. . The goods sold are generally completely new goods or new models/forms of an item.
- Stage of Growth (Growth)
The growth stage is a period of rapid market acceptance and a large increase in profits. At this stage the sales curve and profit curve are increasing, although this stage is a critical stage. Products that are already known to the market lure competitors to enter the market so that the competition is getting tougher. Companies that want to survive need to strengthen the market and encourage brand loyalty. The common way is to expand and improve distribution.
- Maturity stage
The maturity stage is a period of decline in sales growth as the product has been accepted by most of the potential buyers. This stage is marked by the achievement of the highest point in sales and is usually the longest stage in the product life cycle. At this stage the sales curve reaches its peak and begins to decline
- Decline Stage
The Decline Stage is a period when sales are in a downward direction and profits are thinning. At this stage the company’s sales are moving towards a decline. This decline was partly due to changes in market tastes, the existence of substitute products and changes in technology. This situation makes price competition, excess capacity and company profits disappear.
Characteristics of Product Life Cycle Stages
At each stage there are different opportunities and problems in relation to marketing strategy and profit potential. By recognizing the stage at which a product is, or will be, the management can formulate appropriate marketing plans and strategies.
Marketing Strategy for Each Stage of the Product Life Cycle
The product life cycle concept can be used in developing marketing strategies. The marketing strategies that can be used in each stage of the product life cycle are as follows:
a. Introduction Stage
b. Stage of growth (Growth)
c. Stage of maturity (Maturity)
d. Decline stage (Decline)
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